Can Digital Currency Complicate a Divorce?
In dividing marital assets during a divorce, identifying cryptocurrency so it can be included in any resulting marital settlement can prove challenging.
When filing for a divorce in Texas, dividing marital property is a potentially contentious issue. It is not uncommon for one spouse to attempt to hide assets from the other so that they can avoid including it as part of these proceedings. In this regard, cryptocurrency presents new challenges. Understanding what it is and how to obtain evidence of these assets can make a major difference in the overall amount you are entitled to in any divorce settlements or orders issued in your case.
Cryptocurrency and Divorce
Texas is what is referred to as a community property state. Under the Texas Family Code, this means that any property or assets earned or acquired by the couple over the course of the marriage are considered to belong to them both. They each are entitled to a share of this property in the event of a divorce. In addition to real estate, personal belongings, and money in financial accounts, this includes any online assets they own.
In addition to identifying websites and online businesses your spouse owns, it is important to locate any cryptocurrency they possess. Cryptocurrency is like virtual money. It lives online as a medium of exchange. It uses cryptography, which is a method of protecting information through the use of codes, to secure financial transactions and create additional units. It is traded on a blockchain, which acts as a digital ledger, and is largely unregulated by any federal agencies or governments.
Most people are familiar with cryptocurrency through Bitcoin, which rose to popularity and made investors millions of dollars in 2017 before dropping hard in value over the past year. However, there are numerous other types of cryptocurrency available. Make no mistake — these can be worth significant amounts of money and can represent a sizable portion of your divorce settlement.
Could Your Spouse be Hiding Cryptocurrency?
One of the biggest concerns with cryptocurrency is the potential for a spouse to not disclose these assets on financial affidavits, which are required when filing for divorce in Harris County. Hiding certain assets to avoid having them included as marital property is common. Areas to look for evidence of cryptocurrency include:
- Tax returns: Cryptocurrency may appear as capital gains or losses;
- Bank statements: These may reveal unexplained withdrawals or transfers to cryptocurrency companies;
- Online searches: Blockchains contain public information. A simple search may reveal cryptocurrency your spouse is attempting to hide.
If you believe your spouse owns cryptocurrency that he or she is failing to disclose and the above fails to provide evidence, we may be able to obtain a subpoena for the cryptocurrency company’s records or have a forensic expert examine your spouse’s computer for traces of these transactions.
Get Help from Our Pearland, TX Divorce Attorney
Attorney John Powell III, P.C. is dedicated to getting you the maximum amount you are entitled to in your divorce case. For help in identifying cryptocurrency or other hidden assets, contact our Pearland, TX divorce attorney and request a consultation today.