Cyptocurrencies have created many questions for a variety of industries and transactions. There are many discussions on how Bitcoin and other cryptocurrencies can operate in practice, especially with difficult financial matters such as Ontario divorce settlements. Experts worry that the secrecy and lack of outside access innate in the cryptocurrency systems may make it easier for people to hide these assets from a soon-to-be ex, as well as making it more difficult to divide assets altogether.
In Ontario, parties must disclose all their assets in a divorce. Cryptocurrencies are anonymous in nature, making them easier to hide should a spouse illegally attempt to hide their money. While these assets will hopefully be discovered, the investigation required to uncover anything hidden can be expensive and time-consuming.
Cryptocurrency is easily discoverable when someone first purchases it, as it is easy to trace the transaction from a bank account to a crypocurrency purchase. However, subsequent transactions or movements can be difficult to track, such as if someone transfers their digital wallet onto a USB. Digital forensics may be needed to uncover the truth in these cases, which can be further complicated if other parties, lawyers or judges lack understanding about how cryptocurrencies function.
The volatility of cryptocurrency can also cause challenges, as the value can change dramatically over the course of weeks or even days. Divorces involving digital assets require careful support from a knowledgeable lawyer. Those who feel their spouse may be hiding cyptocurrency or who have questions about how that asset would be considered in their divorce should speak with legal counsel about their concerns.
Source: Fortune, "Bitcoin Is Posing New Challenges for Messy Divorces", Feb. 26, 2018