Why spouses use crypto to hide their cash

| Jun 25, 2021 | Family Law |

In recent years, it has become more common for individuals to attempt to hide their money by investing it in digital currencies, such as Bitcoin. Although Wisconsin law forbids a person from concealing assets in a divorce proceeding, it can be difficult to prove that a person is stashing money in a secret crypto wallet.

Poor communication may make it easier for your spouse to hide assets

It’s not uncommon for one spouse to have complete control over the household’s finances. If you aren’t the person who pays the bills, manages investments and makes other fiscal decisions, you likely wouldn’t suspect that your significant other has an account that you don’t know about. However, bank statements, brokerage statements and income tax returns may all contain evidence that it exists. Your divorce attorney will likely be able to obtain copies of those documents during the discovery process.

The cost of locating a secret account can be significant

Your spouse may have many tools at his or her disposal when it comes to obscuring the presence of a digital wallet. For instance, it may be possible to keep the wallet on a virtual server that you don’t know about. Alternatively, investments may be made with an international broker, which means that it may not be subject to IRS reporting rules. Therefore, the cost of pursuing your share of a cryptocurrency account may exceed the amount that you would be entitled to. Ultimately, it may be possible for your spouse to violate state law without facing any consequences for doing so.

An attorney may use tax returns, bank statements or other records to prove the existence of hidden assets. Finding these assets may make it easier to obtain a favorable settlement in your divorce.