Bitcoin, Etherum, Ripple and other cryptocurrency have taken over the media. In short cryptocurrency are digital or virtual currency that uses cryptography and/or blockchain technology for security. People can use these cryptocurrencies to pay for goods and services or as an investment. They typically can be traded for an amount in US dollars.
When looking over bank statements and financial records the past couple of years in California divorce cases, we have noticed a couple of key words popping up in regards to cryptocurrency which signals red flags. One term is "coinbase". Coinbase is a digital exchange and wallet where cryptocurrency can be stored, purchased, sold and received. Think of coinbase like an online bank for cryptocurrencies.
If coinbase pops up in any financial records, you will want to request and subpoena all records from the other parties’ coinbase account. The other party may be storing and failing to disclose cryptocurrency in his or her coinbase account to avoid giving you your fair share upon divorce. Why is this important? Bitcoin alone as of December 29, 2017, is worth over $14,500 per bitcoin. Thus, the other party may be hiding tens or hundreds of thousands of dollars from you.
Also, keep in mind that parties can receive money for work provided, or goods sold, in the form of cryptocurrency. Instead of receiving a check for a job the other provides, they may receive a bitcoin payment that will not be traced back to their bank account. Finding this cryptocurrency can show the actual amount a spouse is earning, leading to a difference in the amount of child or spousal support.
Most attorneys will not request any documents related to cryptocurrencies. Thus, it is important to discuss with your counsel your potential concerns with regards to cryptocurrencies and your divorce case, as it may lead to a significant difference in your financial settlement or support payments.
If you have a question in regard to Cryptocurrency or divorce case, feel free to contact our office at (805) 422-7966.