Bitcoin: The New Asset Protection Strategy in Divorce Cases
"Asset protection" is definitely a strategy in divorce cases across the United States. The term "asset protection" refers to the use of a legal strategy as a way to hide or shield assets from the Courts. Bitcoins, the relatively new internet currency, will most likely become the next frontier of asset protection.
In cases of divorce, asset protection can take many forms. Sophisticated asset protection techniques involve transferring money to an overseas account, the forming of legal entities (trusts, corporations, limited liability companies) and other methods.
The most unsophisticated and simple type of asset protection, and perhaps the most frequent in divorce cases, is simply holding money in the form of cash (i.e., in the home safe or in a bank safety deposit box). bitcoin cash In this way, a person that is along the way of divorce believes he can "protect" the cash from the divorce process. The divorcing spouse might keep carefully the existence of the cash secret from his spouse, divorce lawyer and Court, in order to avoid being ordered to share the money with his spouse. This plan may or may possibly not be successful, but it is surely not legal because it requires that the person misrepresent his assets to his spouse and to the Court.
A sophisticated divorce lawyer will know how to uncover hidden assets of this kind through the study of financial records and other method of legal discovery. Bitcoin, however, gets the potential to replace the hiding of cash as the utmost common type of asset protection in divorce cases. Given the structure of the bitcoin system and most divorce lawyers ignorance regarding bitcoins, it might become a significantly more successful method than hiding cash.
Bitcoin may be the digital currency that has been created in '09 2009 by the anonymous developer known the by pseudonym as Satoshi Nakamoto. This is a currency that exists only in digital form. All bitcoins and transactions are "registered" on the bitcoin block chain that's updated by bitcoin users rather than a centralized authority. The transactions, however, usually do not include names but rather the digital identification of every bitcoin. Bitcoin owners keep their bitcoins in a bitcoin wallet. The wallet is not necessarily a physical wallet, but instead various options for storing the digital identification of the bitcoin. The wallet may be kept on some type of computer, the server of a bitcoin wallet website, or perhaps a piece of paper.
While is theoretically possible to trace the transfer of a bitcoin by examining the block chain, one is only going to uncover the public identification key of the bitcoin as opposed to the name of the owner. If the wallet is continued a person's computer or on a website (where a party to a divorce registered his name) it is possible to discovery the existence of the bitcoins. However, wallets do not have to be associated with a name. Furthermore, in case a person runs on the "brainwallet" tracing a bitcoin to a particular person becomes almost impossible through any conventional method. A brainwallet may be the usage of a memorized passphrase as a way to store a bitcoin.
The methods for discovering hidden cash could be the first approach of any divorce lawyer for discovering a bitcoin asset protection plan. Unfortunately many, if not most, divorce lawyers and judges are unfamiliar with bitcoins and the truth that bitcoins may be used to hide assets. A divorce lawyer who doesn't understand bitcoins cannot possibly be likely to uncover hidden bitcoin assets. Should you have any suspicion your spouse might be hiding assets, make sure your lawyer understands the bitcoin system and how to discover hidden bitcoin assets.