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The difficulties cryptocurrencies present to divorce lawyers

| Mar 21, 2019 | high asset divorce |

Ever since their introduction back in 2008, cryptocurrencies have had a major impact on the financial and legal worlds. For instance, upon shooting up to around $20,000 a coin, bitcoin has become an alluring investment for anyone looking for a high-risk, high-reward scenario. Even though bitcoin has fallen to one-fifth of its all-time high, people still use it as a store for value and potentially lucrative investment. Seeing as bitcoin has been added to several investors’ portfolios, it now comes up repeatedly in divorce proceedings, which presents lawyers with its own set of problems.

When it comes to cryptocurrencies and divorce, not only are lawyers having a hard time dealing with this new digital asset, but the currencies’ unregulated and encrypted nature also makes them ideal vehicles for stashing away funds in high-asset divorces, complicating the process even further. It is easy to track the trading of complete novices on crypto exchanges and find out how much they hold in these digital assets. However, if traders know what they are doing, they can hide their crypto assets, and the lawyers will be none the wiser. In fact, by simply buying bitcoin with cash instead of doing it online, an individual can make sure that his or her purchase is untraceable.

As a result, several lawyers expect cryptocurrencies to pop up more and more in future divorces, especially for the wealthy who have a large incentive to hide their assets. To make matters worse, the regulation surrounding crypto assets is very lax, which should come as no surprise when one realizes that the law is straining to catch up. Yet, this makes protecting against fraud a difficult endeavor.

Fortunately, lawyers and accountants are doing their best to keep up with the times, starting by educating themselves. In fact, there are courses and guides on the topic, helping numerous professionals who might encounter the real thing in their jobs. Consequently, anyone considering divorce might benefit from reaching out to an experienced lawyer who takes the time to stay up to date with his or her industry, especially if either spouse has crypto assets.