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Using Bitcoins to hide assets during a divorce

When declaring marital assets during a divorce, it is very important that all assets are declared. This includes cash, bonds, stocks, private collections such as as art, properties and more. However, some spouses choose to hide assets from their soon-to-be ex-spouses. The courts frown very heavily at such actions and if the hidden assets are found, the spouse that hid them can find his or her share of the martial assets drastically decreased in the final divorce decree.

One way that some spouses attempt to hide assets is through the use of Bitcoins. Satoshi Nakamoto, the inventor of Bitcoins, defines the currency as "A Peer-to-Peer Electronic Cash System." Known as a cryptocurrency, Bitcoin owners can transfer money without using a middleman like Money Gram or a bank. The spouse is also identified during the currency transfer only by a string of numbers used for the Bitcoins' wallet address. That's where Bitcoin's are stored.

While there are services available known Bitcoin mixers that can make it more difficult to track a Bitcoin user's trail, the transactions can be traced by the right forensic analyst.

While this may sound like a completely anonymous means of hiding this electronic cash, it isn't. There are forensic specialists who can identify the actual identities of the Bitcoin users. For those in highly contentious divorces, this identification could result in substantial penalties by the court in the final property division.

If you believe your spouse is hiding assets, it's important to let your lawyer know. He or she can work to locate the hidden assets or find a forensic analyst who can do so.

Source: Huffington Post, "Hiding Assets with Bitcoin in Divorce," David Centeno, Feb. 23, 2017

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