Cryptocurrency emerged as a new form of asset in 2009 with the development of Bitcoin. This digital currency often creates difficulties during divorces. Cryptocurrency by its design can be hard to trace, which forms an opportunity for a spouse in Arizona to hide the asset. The values of various cryptocurrencies fluctuate as well. Pinning down the value of a cryptocurrency asset for the purposes of the divorce settlement can be challenging.
Investigators have the ability to track down cryptocurrency holdings when people buy them through online exchanges. A forensic accountant might locate the original money in a bank account that was transferred to the cryptocurrency transaction. Direct purchases of cryptocurrency without the involvement of an online exchange require much greater investigative efforts to find. A person caught attempting to hide cryptocurrency assets during a divorce might lose a portion of the divorce settlement or potentially face jail time because hiding assets is a form of contempt of court.
Even when a person properly discloses cryptocurrency assets, their value could complicate settlement negotiations. Extreme value fluctuations could unbalance the terms of a settlement. In one British case, a person’s cryptocurrency holdings went from £80,000 to £1 million and then down to £600,000 in less than two years. To address the wild ups and downs, a divorcing couple might choose to take multiple valuations during the negotiations or choose the value on the day of the settlement.
A person entering a high-asset divorce situation might want an attorney with the resources to manage negotiations or litigation about complex assets. An attorney might consult a forensic accountant to determine if the other party has made a complete financial disclosure. If asset movements appear suspicious, then an attorney may opt to petition the court to pursue additional financial information from the other spouse.