What Happens If My Spouse Is Hiding Cryptocurrency in Divorce?

Suspecting that your spouse is hiding assets during a divorce is a distressing experience. But that feeling of betrayal can intensify when you realize they might be using your unfamiliarity with new technology, like cryptocurrency, to conceal wealth. Because cryptocurrency is a mystery to most people (only 13.8% of Americans own it), this isn’t a simple omission; it can feel like a deliberate strategy to undermine your financial security.

For over a decade, Women’s Divorce & Family Law Group has stood as a pillar for women and mothers in Chicago. As one of the first law firms in the area to focus on the unique struggles women face in divorce, we have consistently fought for those who are financially disadvantaged, securing settlements that are truly fair. We understand that new technologies like cryptocurrency can feel intimidating, but you don’t have to know everything to protect your future. There are clear legal options available.

If cryptocurrency is being hidden during a divorce, the legal system allows you to:

• Have your attorney conduct a formal investigation of your spouse’s finances during the discovery process.
• Bring in professionals who understand how to trace digital assets.
• Make certain all marital property is accounted for before anything is divided.
• Hold your spouse accountable if they try to conceal assets.

Understanding these options can shift you from feeling shut out to knowing where you stand.

How Easy Is it for My Spouse to Hide Cryptocurrency in Our Divorce?

Cryptocurrency is a digital form of money that exists only online, with no physical coins or bills. Unlike traditional bank accounts that generate paper statements, crypto transactions are recorded on a digital ledger called a blockchain. This lack of a paper trail can make it easier to conceal than other assets.

However, even the most secretive spouse usually leaves clues. Most people who are trying to hide assets show some common signs you can watch for:

•  Unexplained, large withdrawals from joint bank accounts
•  New or unfamiliar financial apps appearing on shared devices like phones or computers
•  Sudden secrecy or defensiveness around financial matters

Even if you only have suspicions, you have powerful legal options to find the answers you need.

What Legal Options Do I Have to Uncover Hidden Crypto Assets During Divorce?

If you suspect your spouse is hiding cryptocurrency, the discovery phase of your divorce is not something you should rush. While many people try to speed through this process to save time and money, taking a deliberate, thorough approach is crucial to uncovering hidden assets.

During discovery, your spouse is legally required to disclose all their assets under oath. Your attorney can use several powerful tools to compel this disclosure and find hidden wealth:

•  Interrogatories: These are written questions that your spouse must answer under oath. Your attorney can ask specific questions about their knowledge of and investment in cryptocurrencies, wallets, and exchanges.
•  Formal Document Requests (Notice to Produce): Your legal team can formally request specific documents, such as bank statements, credit card bills, and tax returns. These can be analyzed for unexplained transfers to cryptocurrency exchanges or large cash withdrawals that may have been used to purchase digital assets.
•  Depositions: This involves your attorney questioning your spouse directly and in person, under oath, with a court reporter transcribing everything. It’s a chance to ask follow-up questions in real-time about their financial activities and any inconsistencies found in their documents.
•  Subpoenas: If your spouse is uncooperative, your attorney can issue subpoenas to third parties like banks, financial institutions, and known cryptocurrency exchanges. These subpoenas legally require them to turn over records related to your spouse’s accounts and transactions.

While these tools are designed to expose hidden assets, uncovering digital currency presents unique challenges. Transactions can be difficult to trace on the blockchain, and assets can be moved quickly between anonymous digital wallets.

How Can Hidden Cryptocurrency Assets Be Traced?

When traditional discovery tools fall short, forensic accountants can provide the knowledge needed to trace hidden cryptocurrency. These financial detectives employ a range of sophisticated methods to follow the digital trail, including:

• Blockchain Analysis: They use advanced software to trace transactions on the blockchain. By analyzing public ledgers, they can follow the flow of funds from a known exchange account to anonymous digital wallets, helping to identify where the assets are being held.
• Connecting Financial Records: They scrutinize bank statements, credit card bills, and other financial documents for evidence of cryptocurrency purchases. A transfer to a known crypto exchange can serve as a starting point for a deeper investigation.
• Tax Return Examination: They carefully review past tax returns for any declared gains or losses from cryptocurrency, which can provide a clear admission of crypto ownership.

These methods allow forensic accountants to piece together a digital trail, transforming complex data into a clear financial picture.

How Will Courts Divide Cryptocurrency If It Is Found?

In Illinois, cryptocurrency acquired during the marriage is considered marital property, which means it must be divided equitably between you and your spouse.

To divide it fairly, the court must first determine its value. This involves properly valuing the cryptocurrency at its current market rate, which can be complex due to market volatility.

Once the value is established, the court has several options for equitable division:

•  One spouse can keep the cryptocurrency while the other receives marital assets of equivalent value.
•  The digital currency can be sold, and the cash proceeds divided between both parties.
•  The actual crypto coins can be distributed between the spouses.

It’s important to understand that if your spouse attempted to hide these assets, they will face serious consequences. A judge can impose significant penalties, including awarding you a larger share of the marital property to achieve a just and fair outcome.

Restore Your Control and Financial Security

Dealing with hidden cryptocurrency in a divorce can leave you feeling powerless and uncertain about your financial future. However, you must remember that legal tools are available to uncover the truth. Through the discovery process, your legal team can work with forensic accountants to trace and value these assets.

Our divorce attorneys at Women’s Divorce & Family Law Group are experienced in handling complex financial matters, including those involving cryptocurrency. Contact our Chicago office to discuss your case and learn how we can help uphold fairness during your divorce.