As the digital age progresses, cryptocurrency is increasingly becoming an asset that couples may need to split in a divorce. However, due to its anonymous nature, tracking and dividing cryptocurrency can be a complex process. This article aims to provide a guide on the legal strategies that can be used to track cryptocurrency during a divorce.
Understanding Cryptocurrency
Cryptocurrency is a digital or virtual currency that uses cryptography for security. It is decentralized and built on technology called blockchain, which is a distributed ledger enforced by a network of computers called nodes. The most popular cryptocurrency is Bitcoin, but there are more than 5,000 different cryptocurrencies in circulation.
Why Cryptocurrency is Difficult to Track
One of the main reasons why cryptocurrency is challenging to track is its anonymous nature. Transactions can be carried out without the need for a middleman, such as a bank, and while all transactions are recorded on the blockchain, the identities of the parties involved are disguised.
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Legal Strategies for Tracking Cryptocurrency
1. Hire a Forensic Accountant
Forensic accountants specialize in investigating financial discrepancies and fraudulent activities. They can trace funds, identify assets, and evaluate financial reports. With expertise in cryptocurrencies, forensic accountants can decode transactions, identify patterns, and uncover hidden assets.
2. Obtain a Court Order
Obtaining a court order can compel a spouse to disclose their cryptocurrency assets. If a spouse is found to be hiding assets, they could face severe penalties, including contempt of court charges.
3. Use of Subpoenas
Subpoenas can be served to cryptocurrency exchanges requiring them to provide information about a specific individual's transactions. While it might not directly identify hidden assets, it can provide a trail that can be followed.
Dividing Cryptocurrency in Divorce
Once the cryptocurrency is tracked and valued, it must be divided. This process can be complicated due to the volatile nature of cryptocurrencies. It's crucial to get legal advice to ensure the division is fair and equitable.
Conclusion
Divorce proceedings are complicated enough without the added complexity of tracking and dividing cryptocurrency. However, with the right legal strategies and professional assistance, it is possible to ensure a fair distribution of these digital assets.
Disclaimer
This article is meant to serve as a general guide and does not constitute legal advice. Always consult with a legal professional for advice on your specific situation.
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Written by Jonathan D. Steele
Chicago divorce attorney with cybersecurity certifications (Security+, CEH, ISC2). Illinois Super Lawyers Rising Star 2016-2025.
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