Divorcing Couples Fight Over the Kids, the House and Now the Crypto

Divorcing Couples Fight Over the Kids House and Now Crypto Illustration credit Jackson Gibbs for the New York Times


Illustration credit Jackson Gibbs for the New York Times

summarized from 6 pages to 1:

article by David Yaffe-Bellany, New York Times

Dividing the family’s Bitcoin stash has become a major source of contention in divorce cases.

The difficulty of tracking and valuing cryptocurrency, a digital asset traded on a decentralized network, is creating new headaches.

Divorce lawyers say spouses often under report their holdings, or try to hide funds in online wallets that can be difficult to get into.

However digital assets are traceable. Transactions are recorded on public ledgers called blockchains, enabling savvy analysts to follow the money.

Some divorce lawyers rely on a growing industry of forensic investigators, who charge tens of thousands of dollars to track the movement of cryptocurrencies like Bitcoin and Ether from online exchanges to digital wallets. The investigative firm CipherBlade has worked on about 100 crypto related divorces over the last few years. Paul Sibenik, forensic analyst for the company said in multiple cases he has traced more than $10 million in cryptocurrency.

Nearly a dozen lawyers and forensic investigators described divorce cases in which a spouse was accused of lying about cryptocurrency transactions or hiding digital assets.

“A court can order a cryptocurrency exchange to turn over funds. But the online wallets in which many investors store cryptocurrency are not subject to any centralized control; access requires a unique password created by the wallet’s owner. Without that digital key, the husband’s funds were effectively out of the soon-to-be-ex-wife’s reach.

In some divorces, the cryptocurrency stash turns out to be tiny or even nonexistent. Several lawyers described cases in which a wife’s suspicions were unfounded.”

Examples of 4 divorce cases involving crypto:

1) Erica and Francis deSouza

2) Divorce case in which a woman accused her husband of under reporting his cryptocurrency holdings. Nicholas Himonidis, NY forensic investigator found digital wallet containing Monero.

3) Another case from Nicholas Himonidis, where digital currencies were moved from Coinbase.

4) Greg Salant, divorce lawyer White Plains NY, case with forensic investigator, Mark DiMichael CPA, ABV, CFF, CFE, CCFI involving a Coinbase subpoena, the dark web, and failure to report on income tax returns.

mentions: Wences Casares, Jacqueline (Lipson) Newman, Kelly Burris

Ilustration credit Jackson Gibbs

Photo credits Joshua Bright

contributed researchers Kirsten Noyes & Sheelagh McNeill