Rarely does a divorce leave no property division or other conflicts. Ex-spouses began using cryptocurrencies to save the most money. They are more difficult to track, assess, and access. This material is a retelling from an article by The New York Times on cryptocurrencies in divorce proceedings. It also discusses the effectiveness of such a decision.
Erica and Francis De Souza, both from San Francisco, have been divorcing for eight years. It is almost as long as their marriage. They shared custody, the proceeds of her husband’s computer company and a $3.6 million house.
The court still has to decide what happens to more than one million bitcoins.
Before leaving his wife, Francis De Souza purchased more than 1000 bitcoins in 2013. After the collapse of the course, De Souza lost nearly half the funds. After a three year trial, the court of second instance ruled that De Souza had not disclosed the details of his investment. The price of bitcoins rose and awarded De Souza’s ex-wife $ 6 million.
These situations are not uncommon. Due to the rise of cryptocurrency, divorces can become a matter of accusation of fraud and inability manage finances.
Ex-spouses often try to hide or downplay their assets by creating online wallets that are difficult to locate.
“Initially, the money was under the mattress and then in a Cayman Islands bank. It’s now in cryptocurrency,” Jacqueline Newman from New York, a divorce attorney, says.
It is not easy to track the movements of digital assets, but it is possible. Some lawyers hire investigators to monitor the movements of digital assets like bitcoin and ether, which can cost thousands of dollars.
The CipherBlade investigative company has been involved in over a hundred divorce proceedings involving cryptocurrencies in the last few years. Paul Sibenick, analyst at CipherBlade, notes that he discovered more than $ 10,000,000 that the husband had hidden from his wife in several cases.
The New York Times could not interview any of these couples. However, there are some stories that show how these divorces can occur.
- De Souza was married in September 2001. Francis also founded the instant messaging company IMlogic in the same year. It later went public and was sold for more than $ 10,000,000. He bought bitcoins in April 2013 for approximately $ 150 000.
- The couple split in the same year. Soon after, De Souza announced that he owned bitcoins. The couple was ready to divide the assets by 2017, and the crypto assets had surpassed $21 million.
- But there was another circumstance. De Susa revealed that less than half of his funds were spent on Mt. Gox went bankrupt in 2014. De Susa was denied access to the funds.
- His ex-wife’s lawyers drew attention on the fact that he hadn’t reported this before and accused him hiding funds. These assets have not been found since then.
- De Susa, now the CEO of Illumina Biotechnology, was found to have violated the rules for divorcing because he failed to inform his wife in full of his assets. Francis paid half the bitcoins that he had before the bankruptcy of the Mt. gox crypto exchange.
He now has 57 bitcoins, which is approximately $ 2.5 million at the time this article was published. Erica De Souza’s bitcoins now total more than $23million
We don’t always talk about large sums of money. Nick Himonidis, a researcher who examines the movements of funds in cryptocurrency divorces found $ 700 000 in Monero cryptocurrency on a “forgotten”. Another participant in a divorce proceeding took $ 2,000,000 from an account on Coinbase and transferred it to digital wallets. He then left the United States.
Online wallets are where crypto investors store their funds. They do not fall under the authority and can be accessed by former partners. A crypto exchange may be able to provide valuable information to the court.
Gregory Salanta’s client suggested to him that her husband had a cryptocurrency. The court was not informed of this discovery until 2020. Salanta contacted Coinbase to obtain data about transactions. With the assistance of Mark Dee Michael, Salanta discovered that her ex-husband had made payments via darkweb and transferred approximately $ 225 000 in the crypts to anonymous addresses. He did not mention this in his declarations. The ex-wife received a portion of the funds.
Sometimes, the cryptocurrency assets of a wife are too small and this can lead to suspicions. Kelly Burris, a Austin divorce lawyer, claims that her husbands are increasingly telling her about plans for hiding cryptocurrency assets.
Burris frequently speaks out about the difficulty of tracking digital assets. Customers are not often creative and will sometimes offer to purchase cryptocurrencies using an ATM.
They’re like, “She’s not going track the money. The lawyer assures her that she will not have access to them in any manner.