Cryptocurrency has gained popularity in recent years as a digital currency that operates independently of traditional banking systems. It offers many advantages, but it also has potential as a tool for wrongdoing
During divorce, one party may try to hide assets through various means. As cryptocurrency became more mainstream, individuals found it a convenient new way to conceal money for several reasons.
Anonymity and privacy
Cryptocurrency transactions are often pseudonymous, meaning that they use unique addresses rather than personal information. The digital currency is also free of oversight from traditional financial institutions. This anonymity and lack of regulation can make it challenging to trace the source of funds.
Ease of transfer
Cryptocurrency allows for seamless and instantaneous transfers of funds across borders. Individuals can quickly and discreetly move money to offshore or undisclosed accounts where they are harder to locate.
Forensic accountants are financial professionals who specialize in investigating financial irregularities and uncovering hidden assets. They can trace even anonymous money by analyzing blockchain records and using various tools and techniques to identify the movement of funds. They can also accurately value cryptocurrency holdings. Their testimony can be crucial in establishing the true financial picture of both spouses.
According to bankrate.com, the value of all cryptocurrency is over a trillion dollars. The same qualities that make it so attractive to so many have made it an appealing option for individuals seeking to hide assets. When individuals conceal funds during divorce proceedings, they prevent their soon-to-be ex-spouses from receiving their fair share of marital assets. A forensic accountant can help prevent this by uncovering any stashed away property, investments or accounts.