“Asset protection” has long been a strategy in cases of divorce across the United States. The term “asset protection” refers to the use of a legal strategy in order to hide or shield assets in the Courts. Bitcoins, the relatively brand-new internet currency, will most likely become the next frontier of asset protection.
Within divorce cases, asset protection can take numerous forms. Sophisticated asset protection techniques involve transferring money to an abroad account, the formation of legal entities (trusts, corporations, limited liability companies) and other methods.
The most unsophisticated and simple form of asset protection, and perhaps the most common in divorce cases, is actually holding money in the form of cash (i. e., inside a home secure or in a bank safety down payment box). In this way, a person that is in the divorce believes that he can “protect” the cash from the divorce process. The divorcing spouse might keep the living of the cash secret from his spouse, divorce lawyer and Courtroom, in order to avoid being ordered to share the money with his spouse. This strategy may or may not be effective, but it is surely not legal since it requires that the person misrepresent their assets to his spouse and to the Court.
A sophisticated divorce lawyer will know how to uncover hidden property of this kind through the examination of economic records and other means of legal discovery. Bitcoin, however , has the potential to change the hiding of cash as the most common form of asset protection within divorce cases. Given the structure from the bitcoin system and most divorce lawyers ignorance regarding bitcoins, it could turn into a significantly more successful method than hiding cash.
Bitcoin is the digital foreign currency that was created in 2009 by the unknown developer known the by ficticious name as Satoshi Nakamoto. It is a foreign currency that exists only in electronic form.
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All bitcoins and dealings are “registered” on the bitcoin block out chain that is updated by bitcoin users rather than a centralized authority. The particular transactions, however , do not include names but rather the digital identification of every bitcoin. Bitcoin owners keep their own bitcoins in a bitcoin wallet. The wallet is not necessarily a bodily wallet, but rather various methods for keeping the digital identification of the bitcoin. The wallet might be kept on a computer, the server of a bitcoin budget website, or even a piece of paper.
While is theoretically possible to trace the particular transfer of a bitcoin by evaluating the block chain, one is only going to discover the public identification key from the bitcoin rather than the name of the owner. If the wallet is kept on a person’s computer or on a website (where a party to a divorce registered their name) it is possible to discovery the existence of the bitcoins. However , wallets do not have to end up being associated with a name. Furthermore, if a person uses a “brainwallet” tracing a bitcoin to a specific person becomes extremely difficult through any conventional method. A brainwallet is the use of a memorized passphrase in order to store a bitcoin.
The methods for discovering hidden cash will be the first approach of any divorce lawyer for discovering the bitcoin asset protection plan. However many, if not most, divorce lawyers and judges are unfamiliar with bitcoins and the fact that bitcoins can be used to conceal assets. A divorce lawyer who does not understand bitcoins cannot possibly be expected to uncover hidden bitcoin assets. If you have any suspicion that your spouse may be hiding assets, make sure your lawyer knows the bitcoin system and how to find out hidden bitcoin assets.