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Should you worry about hidden digital wallets?

On Behalf of | Apr 22, 2022 | Divorce, Family Law |

Asset division always poses a problem during divorces. It is a complicated and time-consuming process that often costs a lot of money, too, due to the amount of time the litigation takes.

Along with asset division, asset hiding also persists as an ongoing issue even in the modern day. It manifests in different ways today though, such as through the use of cryptocurrency.

Why was cryptocurrency useful?

CNBC discusses the presence of cryptocurrency in divorce situations. Up until recently, not many people even knew what cryptocurrency was. This niche form of money actually lacked a lot of regulation up until this year. Not even the IRS treated cryptocurrency as taxable income until the current tax year.

Because of that, many people used cryptocurrency as a way to commit certain crimes like money laundering or fraud. Many divorcees also turned to this as a way of hiding assets, knowing that their spouses would never guess to check a digital wallet for missing money.

However, these days, more people know about cryptocurrency and digital assets. Divorce attorneys and forensic financial analysts alike know to keep an eye out for hot trails on the digital front.

Red flags to watch out for

Likewise, it is still possible to determine asset hiding due to the strange behaviors of an individual trying to hide assets. For example, many will show a sudden or strengthened negative reaction to sharing their financial information or their digital devices, afraid that a spouse may notice something amiss.

Many may also switch up their saving or spending behaviors suddenly, with a number suddenly cutting out all superfluous expenses to tuck away as much money as possible. If one notices such signs, it is prudent to pursue a case.