While the digital currency Bitcoin may seem like something out of a sci-fi movie, it is very much a reality and can be the perfect way for devious divorcees to hide assets in an untraceable form.
For years now, soon-to-be ex-spouses have been using every method in the book to hide their assets, from putting them in safety deposit boxes to giving them to a friend or family member. Bitcoin offers the same result, but incorporates the magic of technology, something we have all come to know and love.
Bitcoin, only recently invented in 2009, has gained massive exposure over the past few years and is accepted by everyday companies like Wordpress, Reddit, PayPal and OkCupid. Now, scheming sweethearts are starting to take advantage of this phenomenon. By hiding their funds in Bitcoin, their money becomes undetectable and they can conceal their wealth in an unregulated format. It provides anonymity for investors, as banks and shareholders do not regulate the currency. This makes it nearly impossible to trace back to a certain individual.
Volatility is the name of the game! The value of Bitcoin can encounter massive spikes from day to day, which can give divorcees a run for their money (no pun intended). This can be either a risk or a benefit for investors. Within as little as one day, the value of their investment can decrease to as much as half of the original amount.
That being said, if you suspect your unscrupulous ex-spouse of hiding assets in Bitcoin and you plan to apply for asset recovery, be sure to work with your lawyer to determine when you should go after it, and be sure to use the value at settlement rather than on the day of payment.
In this digital age, people are becoming more and more inventive with their asset-concealment methods. While it's difficult to protect yourself entirely, be aware of a possible footprint that may form after your ex-spouse converts real assets into Bitcoin. However, when the transfers are actually made is when it becomes tricky.
We recently asked a few people what the plural form of Bitcoin was, and no one had any idea. Let us know if you do!
- Co-authored by Brendan Lyle and Rachel Reda