With the sporadic increase in the use of cryptocurrncy to hide wealth, alarms are coming up that divorcing couples could use Bitcoin to hide some their wealth from each other.
The inscrutability of Cryptocurrencies is being used by divorcing spouse to obscure their true wealth and this unprecedented move has been giving the court of justice a lot of problems. Lawyers have started pointing out that the obscurity related with cryptocurrency may be enticing to seperating couples, who are trying to conceal properties from each other.
Having realized the new wealth concealing strategy used nowadays, the courts have considerable resources available to them for investigating areas where assets may be hidden.
Finding Hidden Cryptocurrency Assets is not an easy task and in some cases, it might be almost impossible. Courts will go to any lengths in order to unveil concealed propertises but their attempts have, oftentimes, been met by unsurpassable constraints..
Chitroda opined that the firm was currently dealing with three separate cases in which the spouse had used cyrptocurrencies to attempt to hide assets from the wife. The cryptocurrencies bought included Bitcoin, Ethereum and Ripple, among others.
“These are the first cases we have seen, and we expect to see many more. There will also be those divorces where a spouse may not have disclosed such assets, leaving a traceability nightmare,” said Chitroda.
Likewise, Jacqueline Fitzgerald affirmed that “Proving that one spouse has a substantial holding in a cryptocurrency and adding that to the marital assets can be a big problem.” The reason is that cryptocurrencies don’t have a centralized system and it is currently impossible for courts to freeze digital assets, said Fitzgerald. This could mean that divorce cases are about to become more challenging on a regular basis. Hiding antiques, art and other tangible items is easier for a court to trace, clarified Fitzgerald.
Although the court is trying to develop strategies to tackle such cases but, at the moment, there is only a limited amount of guidance regarding the way these situations should be handled. This is primarily due to the fact that cryptocurrencies are still quite new forms of investment, and the justice system requires time to develop a strategy.
