Divorcees are using cryptocurrency to hide money. How experts find it

Divorcees are using cryptocurrency to hide money. How experts find it

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“The hardest part for attorneys is first to determine whether there was an investment,” says Radna. “And then, once you have that suspicion, to go after it.”
While some divorcees know about cryptocurrency from past conversations, others may suspect hidden funds based on their spouse’s lifestyle changes, she said.
For example, their spouse may suddenly have a bunch of extra money or they may make a large purchase, such as an expensive new car.
If a spouse thinks there may be significant amounts of hidden cryptocurrency, an attorney may file a subpoena, or court order, to get access to their spouse’s computer or electronic devices, Radna says.
There are several ways to find secret cryptocurrency accounts.
Forensic experts may scour electronically stored information for digital currency ticker symbols or search devices for login credentials.
They may also check for confirmation emails from exchanges or transfer activity on bank statements. There may even be records of cryptocurrency income on past tax returns.
A spouse may also have listed cryptocurrency on past loan applications to boost their chances of approval, Radna said. Difficult to track
While older cryptocurrencies like bitcoin or ethereum may be easier to track, others may be more difficult for experts to find.
For example, monero, dash, zcash, PIVX, verge, horizen and grin are among the most anonymous cryptocurrency, said Radna.
Other challenges may arise when dealing with foreign cryptocurrency exchanges.
While attorneys can subpoena U.S.-based exchanges, it may be tough to get records from foreign companies, said Chicago-based divorce attorney Patrick Markey. Expensive to track
Of course, divorcees need to weigh the cost before embarking on a cryptocurrency hunt. Before starting, a spouse may complete an analysis to gauge how much money they may be trying to track down.
“We’re looking for people that have made significant amounts of money for it to be worth the investigation,” said Radna.
Forensic experts typically charge hourly and may be costly, depending on the number of electronic devices and volume of information, she said.
Moreover, the divorce attorney has to spend extra time reviewing what forensic experts find to make a legal argument to the court.
“If it’s $5,000 [of cryptocurrency], it’s really not worth it,” she said. Planning ahead
The spouse with less money should do some planning before going forward with the divorce, said Radna. They may start gathering information and tallying the marital assets.
“As they start putting that together, they’ll probably start seeing holes,” she said.
The spouse may check joint accounts to see if money is missing, and if the spouse knows a specific cryptocurrency account exists, their attorney may request access.
“It’s really about getting as much information as you can about how they’re buying it,” said Markey.
Missing money may suggest a gambling problem, offshore bank accounts, an extramarital affair, another family or cryptocurrency, Radna said.
“And once you have an idea of the value of what’s missing, or what might have been invested, then your attorney can do the rest of the work,” she added. Copyright CNBCs – CNBC

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