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Cryptocurrency can cause disclosure issues in high asset divorce

One of the reasons divorces can last so long is that some parties refuse to be forthcoming with asset disclosure. While British Columbia family law requires all assets to be disclosed in order to finalize a divorce settlement, those going through a high asset divorce may find themselves dealing with a partner who attempts to hide information. The costs of trying to hide assets far outweigh the positives, and such actions can leave people in vicious court battles for months or even years.

One of the most recent ways people have attempted to hide assets in British Columbia divorces is through cryptocurrency. These present a unique challenge for courts, as cryptocurrencies are more difficult to trace due to their decentralized nature. There is no physical form of these assets and they only exist on a protected network, so proving their existence can be difficult if not impossible.

While this is a major hurdle for those facing challenges in high asset divorce proceedings, it is not impossible to overcome. For example, it may be possible to trace the original purchase of cryptocurrency through the party's bank account, though proving where the money went can be challenging. It may also be possible to return to court if and when the cryptocurrency owner chooses to sell these assets for a more traceable currency.

British Columbia family courts can take several actions if they have evidence of someone not disclosing assets. While there may be some legal loopholes regarding cryptocurrency today, lawmakers and legal professionals are working to catch up and protect long-standing laws in divorce proceedings. Those facing a high asset divorce and are concerned about disclosure issues should ask a family lawyer for counsel.

Source: yourmoney.com, "Non-disclosure upon divorce: is anywhere safe to hide?", Amanda Sandys and Christine Abbotts, April 11, 2018

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