Cryptocurrency in an Illinois Divorce: Finding Hidden Crypto

Cryptocurrency is handled like any other asset in an Illinois divorce: it has to be disclosed, classified as marital or non-marital, valued, and divided. What makes it harder is that it can sit in an app, on an exchange in another state, or on a small hardware device, and its price can move sharply between the day a case is filed and the day it ends. This page explains how crypto is disclosed, how hidden crypto is found, how it is valued and divided, and what to do if you think your spouse moved or spent it.

Is cryptocurrency marital property in Illinois?

Usually, if it was acquired during the marriage. Illinois defines marital property as all property acquired by either spouse after the marriage, with listed exceptions (750 ILCS 5/503(a)). Property acquired after the marriage and before judgment is presumed marital, and the presumption is overcome only by clear and convincing evidence that the property falls within an exception (750 ILCS 5/503(b)(1)).

Crypto can be non-marital if, for example, it was acquired before the marriage, received as a gift or inheritance, or acquired in exchange for non-marital property (750 ILCS 5/503(a)(1), (2), (6)). The increase in value of non-marital property is also non-marital, subject to reimbursement claims (503(a)(7)). The difficulty is tracing. Crypto is often traded from one coin to another, moved between wallets, or mixed with coins bought later with marital funds. When marital and non-marital property are combined into newly acquired property and lose their separate identities, the result is treated as marital (503(c)(1)(B)), and a reimbursement claim requires contributions that are traceable by clear and convincing evidence (503(c)(2)(A)). If you owned crypto before the marriage, the records showing what you held and when are worth gathering now.

Do I have to list crypto on my Financial Affidavit?

Yes. Illinois requires one statewide form of financial affidavit (750 ILCS 5/501(a)(1)). The current Financial Affidavit (Family & Divorce), a form approved by the Illinois Supreme Court and required in all Illinois circuit courts, includes a section for "Investment/Brokerage Accounts, Mutual Funds, Secured or Unsecured Notes, and Cryptocurrency." The form warns that entering inaccurate or misleading information intentionally or recklessly can lead to "significant penalties and sanctions, including costs and attorney's fees," and it is signed under 735 ILCS 5/1-109, under which a knowingly false material statement is a Class 3 felony.

List exchange accounts, wallets you control, and crypto held through payment or brokerage apps, with balances and the date of each balance. If you are unsure how to describe an asset or where it belongs on the form, ask your lawyer. Leaving it off is the riskier choice.

How do lawyers find crypto that was not disclosed?

Through formal discovery, not self-help. The usual tools are written interrogatories (Ill. S. Ct. R. 213), requests to produce documents, including electronically stored information (Rule 214), depositions, and subpoenas to third parties (Rule 204). Useful records include:

• Bank and credit card statements showing transfers to or from exchanges, crypto ATMs, or payment apps that sell crypto.
• Tax returns and tax forms. The IRS treats digital assets as property, and the federal return asks a question about digital asset activity. For transactions on or after January 1, 2025, brokers report gross proceeds of digital asset sales on Form 1099-DA, and they must report basis for certain transactions on or after January 1, 2026.
• Exchange records obtained by subpoena: account-opening information, deposits and withdrawals, linked bank accounts, and the wallet addresses coins were sent to. Many exchanges are not located in Illinois, and a subpoena may have to go through a court in the state where the records are kept, under that state's procedure. (Illinois's own procedure for subpoenas arriving from other states is the Uniform Interstate Depositions and Discovery Act, 735 ILCS 35.)
• Blockchain analysis. For many cryptocurrencies, transfers are recorded on a public ledger. Once a known wallet address is identified, a qualified analyst can often follow where coins went next, although some tools and coins are designed to make that harder.

Do not log into your spouse's accounts or devices to look for crypto yourself. Accessing another person's accounts without permission can create civil and criminal problems and can taint the evidence. See what Illinois law says about reading a spouse's messages. A broader overview of financial discovery is on the hidden assets page.

What are the red flags of hidden crypto?

None of these proves concealment on its own, but each is worth raising with your lawyer:

• Transfers from a bank account or card to an exchange or crypto ATM that do not match disclosed accounts.
• A "yes" answer to the digital asset question on a joint tax return, or a Form 1099-DA, with no crypto on the financial affidavit.
• Purchases of hardware wallets, or emails from exchanges about new accounts, logins, or withdrawals.
• Large crypto balances that suddenly "disappear" or are described as lost, hacked, or worthless around the time the marriage broke down.
• Spending or lifestyle that the disclosed income and accounts cannot explain.

What if my spouse moved or spent crypto before or during the divorce?

Two different remedies may apply.

Stopping transfers. A spouse can ask the court for a temporary restraining order or preliminary injunction restraining the other spouse from "transferring, encumbering, concealing or otherwise disposing of any property" except in the usual course of business or for the necessities of life (750 ILCS 5/501(a)(2)(i)).

Dissipation. The Illinois Supreme Court defined dissipation as the "use of marital property for the sole benefit of one of the spouses for a purpose unrelated to the marriage at a time that the marriage is undergoing an irreconcilable breakdown" (In re Marriage of O'Neill, 138 Ill. 2d 487 (1990)). Dissipation is a factor in dividing property (750 ILCS 5/503(d)(2)), and the statute imposes conditions:

• A notice of intent to claim dissipation must be given no later than 60 days before trial or 30 days after discovery closes, whichever is later.
• The notice must identify, at a minimum, when the marriage began undergoing an irretrievable breakdown, the property dissipated, and when the dissipation occurred.
• The notice, or a certificate of its service, must be filed with the clerk of the court and served under the applicable rules.
• No dissipation is deemed to have occurred earlier than 3 years after the claiming spouse knew or should have known of it, and in no event earlier than 5 years before the petition for dissolution was filed.

Not every loss is dissipation. Whether trading losses, transfers to a new wallet, or spending count depends on the facts, the purpose, and the timing. Refusing to produce the records can backfire too. Under 750 ILCS 5/508(b), failing to comply with a discovery order is presumed to be without compelling cause or justification, a presumption that can be rebutted only by clear and convincing evidence, and the court then must order the noncomplying party to pay the other side's costs and reasonable attorney's fees in the enforcement proceeding. Rule 219(c) allows further sanctions, up to a default. For an example, see In re Marriage of Howard, a 2026 First District decision affirming a default judgment entered after a spouse refused to produce complete financial records.

How is crypto valued when the price changes every day?

Illinois courts use a fair market value standard. The date of valuation is the date of trial or another date the parties agree to or the court orders in its discretion (750 ILCS 5/503(f), (k)). For crypto, a few practical questions decide most of the value:

• Which date and time? Prices can swing within a single day.
• Which price source? Prices differ across exchanges; agreements should name one.
• What is included? Staking rewards, coins received in forks or airdrops, and coins locked in lending or staking arrangements.
• What reduces value? Transaction fees and any limits on withdrawing locked coins.

How is cryptocurrency divided in an Illinois divorce?

The court divides marital property "in just proportions" after considering all relevant factors (750 ILCS 5/503(d)). Just is not always equal. Common approaches are:

• Splitting the coins themselves. Each spouse receives a share of each holding, so both share the risk of later price changes.
• Offsetting. One spouse keeps the crypto and the other receives other assets of equal value as of the valuation date.
• Selling and dividing the proceeds, which can trigger tax.

Whatever the method, the judgment or settlement should state the units, the deadline for transfer, the receiving wallet or account, who pays transaction fees, and what happens if a transfer is not completed.

What about taxes?

This is a general note, not tax advice. The IRS treats digital assets as property, not currency. Under federal law, a transfer of property between spouses, or to a former spouse when the transfer is incident to the divorce, generally does not trigger gain or loss, and the receiving spouse takes the transferring spouse's adjusted basis (26 U.S.C. § 1041). A transfer is incident to the divorce if it occurs within one year after the marriage ends or is related to the end of the marriage, and special rules apply if a spouse is a nonresident alien. Because basis carries over, two crypto holdings with the same market value can carry very different built-in tax. A tax professional should review any proposed division.

When should I talk to a lawyer?

Before you file, if you believe your spouse is moving crypto, because a restraining order is most useful before assets leave. Before you sign your Financial Affidavit, if you or your spouse hold any digital assets. Before you agree to a valuation date or a division method. And before you move, sell, or transfer any crypto yourself once a case is underway.

About this article

Jonathan D. Steele, a partner at Beermann LLP, moderated "All Things Crypto – What They Are & How They're Valued," a panel at the American Bar Association Section of Family Law Fall CLE Conference in Chicago on October 16, 2026. The panel addressed identifying, tracing, valuing, and dividing cryptocurrency and other digital assets in divorce. This article adapts those topics for people going through an Illinois divorce. His other programs are listed on the speaking page. To discuss a case, call (312) 621-4394 or use the contact form.

Sources

• 750 ILCS 5/501: ilga.gov; 750 ILCS 5/503: ilga.gov; 750 ILCS 5/508: ilga.gov
• 735 ILCS 5/1-109: ilga.gov; 735 ILCS 35 (Uniform Interstate Depositions and Discovery Act): ilga.gov
• Illinois Supreme Court Rules 204, 213, 214, and 219: illinoiscourts.gov
• Financial Affidavit (Family and Divorce Cases), approved statewide form: illinoiscourts.gov
• In re Marriage of O'Neill, 138 Ill. 2d 487 (1990): opinion; In re Marriage of Howard, 2026 IL App (1st) 252439: opinion
• 26 U.S.C. § 1041: govinfo.gov; IRS, Digital assets: irs.gov

This article explains general Illinois law as of October 2026. It is not legal or tax advice about your situation, and reading it does not create an attorney-client relationship.

Written by Jonathan D. Steele

Chicago divorce attorney with cybersecurity certifications (Security+, ISC2 CC, Google Cybersecurity Professional Certificate). Illinois Super Lawyers Rising Star 2016-2025.

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