Is It Illegal to Hide Cryptocurrency in Divorce?

By Jeffrey Yano, Esq. on February 22, 2018 | Last updated on March 21, 2019

It's never a good idea to try to cheat the law. When going through a divorce, property division begins by determining the assets of the splitting couple then divvying up those assets.

Hiding property is, as you might expect, a regular fear and feature of the divorce process. Stocks, bonds, bank accounts, and 401(k)s can be tracked down by your ex's lawyers. As can (more easily) the house, the car, and the dog. But what about anonymously held cryptocurrencies, like Bitcoin?

Assets Are Disclosed in Divorce

When a married couple divorces, property is split between the two parties. How, exactly, depends on the laws in your state. It might involve splitting a couple's 'community property,' or it can involve a process called 'equitable distribution' where a judge determines what's fair for all parties.

In addition to the generally strong emotional turmoil of dissolving a marriage, haggling with your ex-everything over who gets anything can make for a trying time. Then, add to that the potentially high stakes of actually dividing and distributing everyone's wealth in an adversarial proceeding. It's a potential powder keg. It's no mystery why hiding assets is a persistent problem in divorce law.

Your Bitcoin, Your Spouse's Bitcoin?

All assets are disclosed during divorce. Everything, including can't miss items like a house or more moveable stuff like money squirreled away in another form or in another place. This naturally applies to cryptocurrencies like bitcoin. The real issue, however, is enforcement.

Cryptocurrencies offer anonymity, and the new-ness of their rise makes enforcing disclosure more difficult. But there's no doubt that hiding assets in cryptocurrency form isn't lawful. The key term there is "hiding." Courts can be very . . . persuasive when a party proves uncooperative, and can revise property divisions when hidden assets are found.

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