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Divorce and Family Law

Locating crypto assets during divorce

On Behalf of | Jul 16, 2021 | Divorce

Cryptocurrency is the latest means of engaging in business and commerce. This also places it among the newest assets that can be part of property division during a divorce.  These are useful methods to locate cryptocurrency during divorce.

Legal discovery

Early investors tend to speak a lot about their cryptocurrency transactions. You may be able to engage in discovery to obtain this information from people who were involved in these conversations and have information about other assets held by your spouse. Discovery may also provide access to a spouse’s digital information.

Tax and financial information

A spouse may not disclose bitcoin and other cryptocurrency information on their divorce net worth statement. But this information may be contained on tax returns, bank account and credit card statements and loan applications.

Words including coin and crypto on financial documents are a clue that your spouse may have cryptocurrency. Other clues include transfers to gambling websites, transactions on popular exchanges that accept American dollars and large or unordinary ATM and cash withdrawals or other payments.

Wallets

Access to electronic devices may be obtained through discovery or a court order which may be important because cryptocurrency transactions occur online. Searches should also involve a paper wallet and a hardware wallet.

A hardware wallet is a place to store cryptocurrency offline and should be obtained. It looks like a USB drive that can be plugged into a computer. Paper wallets are documents that contain a private key comprised of alphanumeric characters that is a code providing access to these accounts.

Forensic experts

A forensic computer expert knowledgeable in electronic devices may search for a wallet.dat file containing cryptocurrency clues providing access to an individual’s private keys. Experts may be able to locate deleted files in the computer.

These experts can review web browser histories which disclose websites where cryptocurrency was spent. These may include gambling websites or the names of exchanges that were used.

Other evidence

Spouses planning to divorce may leave evidence revealing small withdrawals of cash from ATMs over many years which ultimately purchased cryptocurrency. This is difficult to track down, however.

A spouse taking cryptocurrency for business payments instead of cash is another sign. This evidence, however, requires forensic accounting involving analysis of gross receipts, analysis of costs and contract review

Attorneys can assist spouses with locating assets. They can help assure that your rights are protected.