Watching for deception: Bitcoin may be used to conceal assets in divorce
Increasingly, divorcing spouses who wish to conceal their assets are turning to electronic currencies like Bitcoin.
Bitcoin is the most popular of a host of computer-generated currencies that are used to buy all manner of goods and services. It rivals cash in terms of its anonymity and surpasses it in its ease of transfer and concealment. For these reasons, its initial popularity was due in part to its ability to facilitate illegal activity.
Bitcoins may be purchased online by electronic bank transfer or wire transfer. This method presents some obstacles to asset discovery, but other methods are far more clandestine. Bitcoins may also be purchased in person using cash, leaving virtually no paper trail.
The ability to spend or transfer bitcoins is dependent upon a long password, called a “key.” Bitcoin keys may be stored in computer files or on paper. But if they are memorized instead, the owner may leave literally no physical trace of their existence.
An unscrupulous spouse might even take the step of putting his or her e-currency in the hands of a trusted friend or relative. Huge sums may be transferred with a few keystrokes and with trivial transfer fees.
Individuals who wish to cheat their spouses out of their due compensation have been around for as long as the divorce process. Bitcoin is perhaps the latest, but certainly not the last, new method for doing so. Divorce parties, attorneys and judges need to be aware of all asset concealment methods, old and new.