Rich Americans hide their wealth in Bitcoin during divorce proceedings
Last Updated on 6 November 2023 by CryptoTips.eu
Whoever claimed that there is no clear use case for crypto hasn’t been in divorce court as of late. American men are increasingly hiding their wealth in cryptocurrencies such as Bitcoin and Ethereum, in fancy NFT artwork or in virtual homes on the Metaverse, according to a study that went viral this weekend.
As these assets are more difficult to trace, they hope to trick their wives into believing that they are not as rich as they think, and that the latter is thus entitled to half of what is a far smaller share.
The phenomenon has led to the creation of “crypto hunters”, law firms that employ specialized IT staff to search crypto platforms for assets that remain hidden.
Florida, New York, Texas and Californië
Research published this weekend on the websites of CNBC and Britain’s Daily Mail shows that a new trend has developed during divorces in the United States.
Women enlist the help of lawyers to determine their husbands’ wealth, only to discover that their husbands all of a sudden have far fewer assets than they thought. Interviews with divorce lawyers from Florida, New York, Texas and California show that a new trend has emerged.
A man was caught trying to hide $500,000 worth of bitcoin during a divorce battle.
— whalechart (@WhaleChart) May 20, 2023
The husband had attempted to keep his fortune hidden from the legal proceedings but was exposed by a crypto hunter hired by the wife.
Richer men, faced with divorce of their first wives, are increasingly hiding assets in crypto, so IT specialists are called in to track down those funds as well.
Sarita, the pseudonym used for one of the women interviewed, said her husband, who worked as a banker on Wall Street, tried to hide 12 Bitcoins from her through an account in Hong Kong.
Her lawyer called in a so-called ‘crypto hunter’ who managed to find the digital coins. Since there was no pre-nup, she is now entitled to half of those assets.
Nick Himonidis, a New York-based forensic investigator who is also a licensed private investigator estimates that at the moment some 25% of his divorce-related cases involve cryptocurrency. Some of those cases are simple, such as some bitcoins held in a brokerage account or on a trading platform such as Coinbase. As that company operates in the US, it is easy to track.
But of course if those crypto assets get transferred to offshore accounts, those Bitcoins can all of a sudden become hidden for US courts.
Financial infidelity has become increasingly sophisticated, as investors "hop" coins across blockchains and sink their cash into metaverse properties. https://t.co/lHZo3sbzFw
— NBC Bay Area (@nbcbayarea) May 21, 2023
The new phenomenon is called ‘financial infidelity’. Because most judges and lawyers do not really know how crypto works, it is believed that in a lot of divorce cases it is possible to keep your wealth hidden like this.
Central bank
If you have a spouse that’s very tech savvy, and one that isn’t, it can be somewhat easy to hide those assets.
Divorce attorney Kelly Burris admitted.
The thing with cryptocurrency is it’s not regulated by any kind of centralized bank, so usually you can’t subpoena somebody and get documents and information related to somebody’s cryptocurrency holdings.
Burris said that she currently sees explicit cryptocurrency requests in discovery in 40% to 50% of her cases. Those ex-wives of course also talk to one another.
