Tag Archive for: Chicago crypto attorney

Top 6 Signs Your Spouse is Hiding Crypto

Is my spouse hiding Crypto? We know hiding assets is a penalty-inducing divorce tactic used by many. But in 2022, soon-to-be divorcees are hiding money from family members and authorities using cryptocurrency.

Cryptocurrency nowadays can add new complications to a divorce. Just like any other marital asset, if cryptocurrency, or other digital currency was purchased, or increased in value, during the marriage, it is a marital asset that is subject to distribution in both equitable distribution and community property states.

In the fourth part of our Crypto Currencies and Divorce series, we discussed the situations in which we discussed the situations in which cryptocurrency can be found during the divorce settlement process and also if it can be lost within the settlement. While tracking down the funds isn’t an easy process, this article will give you signs to watch out for.

Here’s what you need to know if your spouse is hiding crypto.Hiding Crypto

1. Bank and Credit Statements

First things first, if you believe that your spouse is hiding cryptocurrency and has used marital money to purchase it, you should take an active role in looking for proof of your suspicions.

Cryptocurrency is usually purchased with liquid cash, so at some point money moves from a bank account into a cryptocurrency exchange. Certain websites function as the entry point for most people interested in obtaining or trading Bitcoin and other digital currencies. Look for popular echange names such as: Coinbase, Binance, Etoro, Coin Switch, Luno and PaxForex. All it can take is one initial transaction in “normal dollars and cents” to enter this new world of Bitcoin, where untold more digital currency can be obtained. 

If you see any crypto activity, however insignificant, it’s worthy to investigate further — especially if your spouse omitted it from the initial deivorce documentation.

2. Crypto Wallets and Private Keys

Crypto keys make for excellent evidence. Each crypto wallet comes with a key that can then be traced to show all transactions associated with the wallet. A sure sign of Crypto activity in the household is the discovery of a crypto key. But not many know what to look for, since the key doesn’t represent a traditional metal object. So what do these keys look like?

A private key is a secret, alphanumeric password/number used to spend/send your bitcoins to another Bitcoin address. It is a 256-bit long number that is picked randomly as soon as you make a wallet.

The degree of randomness and uniqueness is well defined by cryptographic functions for security purposes.

This is how the Bitcoin private key looks:

2zJ4kLf5zgWrnogidDA76MzPL6TsZZY36hpXXssSzNydYXYB9fe

Many of these password keys are stored on a keydrive. If you happen to find this key, take note of it for evidence. Many hide these keydrives in a private and secure place, such as a safe, while others can simply save these password key codes hidden on their laptops.

3. Presence Crypto Exchanges in Apps

See if there are any crypto-related apps installed on shared electronic devices. Look for Bitcoin wallets like Coinbase, Mycelium, Ledger, SoFi, and Trezor, or apps for buying and selling crypto, like CEX.IO or BlockFi.

Any of the common exchanges listed above offer apps for mobile crypto banking. If you share one phone account, you may be able to access the history of all apps downloaded to any phone on your plan. If you are not able to obtain this information on your own, your attorney can add to this to items to be produced during discovery.

4. Loan Applications & Tax Returns

Another area to explore are loan applications and tax returns. If a person is trying to hide assets from you, and they are not disclosing Bitcoin or other cryptocurrencies on their net worth statement, they might record it on a loan application. 

It’s also important to check if your spouse has reported crypto on tax returns. Reporting of digital currency is required by the IRS, even though there are those who fail to do so. In 2014, the IRS declared that virtual currencies are property.

5. Large Online Purchases

For spouses who are hiding currency, they don’t buy the initial crypto to put in their wallet, which in turn, avoids any direct charges made to a bank or credit account. Instead, they connect with a crypto user in one of the many user forums who is willing to accept goods that will be paid in said cryptocurrency. 

The agreement might entail buying items of the crypto owner’s choice on Amazon, and in return, this crypto will be deposited in the owner’s empty wallet, giving them their entrance into this world. It’s important to remember that crypto wallets function completely outside the normal banking system, so no one will be the wiser should this transaction take place — unless you get smart about your spouse’s buying habits. 

Scan Amazon and other online sellers. If you don’t have access to your spouse’s Amazon account, this can be something that your attorney requests to see during divorce discovery.

6. Secretive Behavior with Finances

If you still receive paper statements this is a great way to track down their use of bitcoin and other cryptocurrencies. If the paper trail used to show up in the mail and then suddenly stopped – that’s a red flag and should raise some suspicion. 

It’s important to have passwords to all of your shared online bank and credit accounts, but if they’ve been changed, that’s again, another red flag. Call your bank and credit card company to request copies be sent directly to you for all joint accounts. Let your attorney know as soon as possible so that steps can be taken to make your spouse produce documentation of all joint accounts.

Final Thoughts

If you know or suspect that cryptocurrency will be a part of your divorce, talk to your family law attorney immediately and put together a game plan for dealing with it. 

At Masters Law Group, our team of attorneys are highly experienced in dealing with Cryptocurrencies in divorce and are here to answer your questions about divorce and digital asset division.

Contact us here today for more information, or to schedule a consultation 

Divorce and Cryptocurrencies Part 3: Ethereum Assets.

There’s no doubt that cryptocurrency nowadays can add new complications to divorce. Popular crypto assets like Bitcoin and Ethereum rise (and fall) dramatically in price making them often highly volatile. If you have an impending divorce on your hands, you need to know how to find, value and divide these new world assets. Here’s what you should know. 

In the second part of our Cryptocurrencies and Divorce series, we discussed the situations in which cryptocurrency can be found during the divorce settlement process and also if it can be lost within the settlement. While tracking down the funds isn’t an easy process, our third part of the series will give you a little more insight on the Cryptocurrency Ethereum Assets.

If you or your spouse owns cryptocurrency, you are going to want to make sure it is discussed with your divorce attorney. It may be a marital asset that needs to be valued and divided; but due to cryptocurrency wildly fluctuating, it can sometimes be problematic to value, and therefore split, fairly.

Here’s what you need to know about handling Ethereum Assets amid divorce.

What is Ethereum?

Ethereum, also known as ETH, is a decentralized, open-source blockchain with smart contract functionality. Currently, Ethereum is the largest and most well-established, open-ended decentralized software platform. 

Ethereum comes with its own programming language that runs on a blockchain, enabling developers to build and run distributed applications. The potential applications of Ethereum are wide-ranging and are powered by its native cryptographic token, (ETH).

Ether is used mainly for two purposes: It is traded as a digital currency on exchanges in the same way as other cryptocurrencies, and it is used on the Ethereum network to run applications. According to Ethereum, “people all over the world use ETH to make payments, as a store of value, or as collateral.”

Bitcoin Vs. Ethereum

Ether and Bitcoin are similar and also differ in many ways: Each is a digital currency traded via online exchanges and stored in various types of cryptocurrency wallets. Both of these tokens are not issued or regulated by a central bank or other authority. Both make use of the distributed ledger technology known as blockchain.

Transactions on the Ethereum network may contain executable code, while data affixed to Bitcoin network transactions are generally only for keeping notes. BTC and ETH are both digital currencies, but the primary purpose of ether is not to establish itself as an alternative monetary system but rather to facilitate and monetize the operation of the Ethereum smart contract and dApp platform.

The ultimate main difference between the two is that Bitcoin is primarily designed to be an alternative to traditional currencies and a way to exchange and store value. Ethereum is a programmable blockchain that finds application in numerous areas, including DeFi, smart contracts, and NFTs.

Ethereum is another use case for a blockchain that supports the Bitcoin network and theoretically does not compete with Bitcoin. However, the popularity of ether has pushed it into competition with all other cryptocurrencies, especially from the perspective of traders. For most of its history since the mid-2015 launch, ether has been close behind Bitcoin on rankings of the top cryptocurrencies by market cap.

Finding & Splitting Ethereum Assets

While Bitcoin and Ethereum are not the same thing, it’s important to know that Ethereum can be just as easily divided as Bitcoin. When Bitcoin is considered marital property, the easiest way to divide them is to split the determined value 50/50. Since most Bitcoin can be cashed out in full, splitting the value 50/50 means each spouse would simply get half.

Another way to divide cryptos is by negotiating other marital property in exchange. If the spouse with the cryptocurrencies wants to keep them, they can give up other marital property with the same determined value to the other spouse.

The costs associated with uncovering hidden cryptocurrency assets can also be substantial. Before moving forward with a court order to uncover potential hidden crypto assets, a spouse and their divorce lawyers may want to make sure that they are relatively certain about the outcome. 

The amount of money involved is also a consideration. People with a few hundred or even a few thousand dollars in undisclosed cryptocurrency are rarely the proper target of such an investigation. An experienced family law attorney may help a spouse concerned about crypto assets decide whether or how to pursue a court order and full forensic investigation. 

Final Thoughts

Living in a digital age like we do today, Bitcoin, Ethereum, and other cryptocurrencies are expected to pop up in a divorce settlement. It is important to be prepared and make sure that crypto is properly discovered and valued in family law matters. If you know or suspect that cryptocurrency will be a part of your divorce, talk to your family law attorney immediately and put together a game plan for dealing with it. 

Our team of attorneys are highly experienced in dealing with Cryptocurrencies in divorce and are here to answer your questions about divorce and digital asset division.

Contact us today for more information, or to schedule a consultation.

Can You Lose Bitcoin in a Divorce?

While some cryptocurrencies are easily found during the discovery phase of divorce proceedings, others, such as bitcoin, can be more challenging to find, particularly when they are private. If you have an impending divorce on your hands, you need to know how to find, value and divide them. Here’s what you should know. 

In the first of our Cryptocurrencies and Divorce series, we discussed how the rise and popularity of cryptocurrency has led to some spouses hiding digital assets during divorce settlements, and tracking down the funds isn’t an easy process.

If you or your spouse own cryptocurrency, you are going to want to make sure it is discussed with your divorce attorney. It may be a marital asset that needs to be valued and divided; but due to cryptocurrency wildly fluctuating, it can sometimes be problematic to value, and therefore split fairly.

Here’s what you need to know about handling bitcoin and other cryptos in divorce.

A Quick Recap of Cryptocurrency 

The use of cryptocurrency varies user to user. Some people prefer to use cryptocurrency for online purchases to ensure secure financial transactions. Others might use it simply to capitalize on discounts or rewards offered for the use of digital currencies.

The most popular form of cryptocurrency is Bitcoin. Some examples of other digital currencies are Litecoin, Ethereum, Ripple, Zcash, Bitcoin Cash, and Cardano. Digital currency is bought, sold, and traded on various platforms. Coinbase is a popular platform used for Bitcoin. Some other digital currency exchange platforms are Kraken, BitStamp, ShapeShift, Gemini, and Bisq.

Cryptocurrencies are validated by a blockchain. This refers to a list of records called blocks that are linked together like a chain. Blockchains are designed to be secure. The foundation of a blockchain is a “decentralized database.” Blockchains can include a piece of information called a hash.

It is very important to know if any parties in a family law matter have cryptocurrency. Cryptocurrency can be a marital asset eligible for division in a divorce. If you know cryptocurrency exists, it will need to be valued. Cryptocurrency has an exchange rate just like standard currency and it can be converted into U.S. dollars. There are programs on the internet that can assist with the conversion of cryptocurrency to dollars. It may be helpful to know which conversion rate program that cryptocurrency owner utilizes.

Looking for Cryptocurrency

Figuring out whether or not cryptocurrency exists is important. Have you discussed cryptocurrency with your spouse? Have you overheard them boating to their friends about their crypto wallet? Will bank account statements or credit card statements show deposits or withdrawals from a digital currency platform? Are there emails or other correspondence that contain information about cryptocurrency?

If any of these are true in your marriage or divorce, you should notify your attorney immediately. Your attorney will need to start collecting information about the cryptocurrency. Obtaining documentation about cryptocurrency can be tricky because often the point of cryptocurrency is for transactions to remain private or secure.

First, it needs to be determined if the cryptocurrency owner has a wallet and whether that wallet is online or is a physical device. The wallet will have an ID and a password for logging which can be requested in discovery. Wallets can be similar to a portable hard drive and be an actual physical item. In other instances, the wallet may just be online and through one of the cryptocurrency exchange platforms. Different steps need to be taken to preserve information from both kinds of wallets.

An owner can usually download a transaction history from his/her wallet or exchange platform. The transaction history is often downloaded as an Excel spreadsheet or other electronic document. The download contains information like a bank statement such as date, time, amount of cryptocurrency, conversion rate, balance, transaction ID, and hash information.

Most transactions will show some sort of confirmation of purchase. Often the confirmation occurs via email and serves as a receipt. The confirmation may include the conversion rate, dollar amount, and a date and timestamp. In some instances, the confirmation may identify where the cryptocurrency user deposited the funds after sale or where they withdrew the funds from to make a purchase. This can help you in the long run to identify other assets.

Can You Lose Bitcoin in a Divorce?

Bitcoin is treated the same as any other asset in a divorce. If the bitcoin transaction was before the marriage, was given as a gift or through an inheritance, it is not marital property and usually cannot be divided. Therefore, if the transaction was during the marriage, it is marital property and can be divided.

When bitcoin is considered marital property, the easiest way to divide them is to split the determined value 50/50. Since most bitcoin can be cashed out in full, splitting the value 50/50 means each spouse would simply get half.

Another way to divide bitcoin is by negotiating other marital property in exchange. If the spouse with the bitcoin wants to keep them, they can give up other marital property with the same determined value to the other spouse.

Final Thoughts

These days, bitcoin and other cryptocurrencies are all the rage. As such, the issue of bitcoin is bound to pop up in divorce cases.

It is important to make sure that bitcoin is properly discovered and valued in family law matters. If you know or suspect that cryptocurrency will be a part of your divorce, talk to your family law attorney immediately and put together a game plan for dealing with it. This may include a plan for how to explain how cryptocurrency works with other parties or professionals in your case.

If you are concerned about how your or your spouse’s cryptocurrency assets could affect your divorce or the asset division process, Masters Law Group can help. Our team of highly trained and experienced attorneys are here to answer your questions about divorce and digital asset division.

Contact us today for more information, or to schedule a consultation.