Are Divorcees Hiding Wealth in Bitcoin?

Are Divorcees Hiding Wealth in Bitcoin?

A London divorce lawyer has claimed that Bitcoins are increasingly being used by spouses trying to hide their wealth in divorce cases.

The story, reported in the Daily Mail, suggests that courts are facing more legal battles from divorcing spouses who claim the other side has tried to conceal their wealth.

The anonymous nature of the blockchain means that it can be hard for courts to establish ownership of bitcoin wealth, especially where deliberate attempts have been made to obscure the chain of transactions.

They suggest that a number of forums devoted to Bitcoin have been filled with husbands discussing the option of using digital currencies to hide wealth by transferring the currency between online wallets, to friends, or to areas outside of legal jurisdiction.

Frank Arndt, head of international family law at Stowe Family Law, told the paper that Bitcoins may need to be disclosed as an asset in divorce cases.

He said: ‘Husbands are becoming more and more creative in terms of what they do to reduce their wealth and the courts are struggling to catch up. It’s just like when the internet started and it was difficult for courts to catch up.’

This isn’t the first time the issue has been highlighted. Stuart Hoegner, a gaming lawyer with expertise in bitcoin, and general counsel for Canada’s Bitcoin Alliance, told CoinDesk in December last year that hiding money in divorce cases is nothing new.

He points out, “People have been burying money under rocks, putting money into safety deposit boxes, giving money to friends to hold on to, and saying that they have been gambling money away for a long time. I see bitcoin as an extension of those.”

Image credit: Jennifer Pahlka/Flickr

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