“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 to be able to hide or shield assets from your Courts. Bitcoins, the relatively new internet currency, will most likely become the following frontier of asset protection.
Within divorce cases, asset protection can take many forms. Sophisticated asset protection techniques involve transferring money to an overseas account, the formation of lawful entities (trusts, corporations, limited responsibility companies) and other methods.
The most unsophisticated and simple form of asset defense, and perhaps the most common in divorce cases, is simply holding money in the form of money (i. e., inside a home secure or in a bank safety down payment box). In this way, a person that is in the process of divorce believes that he can “protect” the cash from the divorce process. The particular divorcing spouse might keep the existence of the cash secret from their spouse, divorce lawyer and Court, in order to avoid being ordered to share the cash with his spouse. This strategy may or may not be prosperous, but it is surely not legal because it requires that the person misrepresent his assets to his spouse and also to the Court.
A sophisticated divorce attorney will know how to uncover hidden resources of this kind through the examination of financial records and other means of legal breakthrough discovery. Bitcoin, however , has the potential to change the hiding of cash because the most common form of asset protection within divorce cases. Given the structure from the bitcoin system and most divorce attorneys ignorance regarding bitcoins, it could turn into a significantly more successful method than concealing cash.
Bitcoin is the digital foreign currency that was created in 2009 by the anonymous developer known the by ficticious name as Satoshi Nakamoto. It is a currency that exists only in electronic form. All bitcoins and dealings are “registered” on the bitcoin block 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 each 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 pc, the server of a bitcoin wallet website, or even a piece of paper.
While is theoretically possible to trace the transfer of a bitcoin by analyzing the block chain, one will simply discover the public identification key from the bitcoin rather than the name of the owner. If the wallet is kept on someone¡¯s computer or on a website (where a party to a divorce registered their name) it is possible to discovery the existence of the particular bitcoins. However , wallets do not have to be associated with a name. Furthermore, if an individual uses a “brainwallet” tracing a bitcoin to a specific person becomes nearly impossible through any conventional method. The brainwallet is the use of a memorized passphrase in order to store a bitcoin.
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The methods for discovering hidden money will be the first approach of any kind of divorce lawyer for discovering the bitcoin asset protection plan. Unfortunately 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 isn’t going to understand bitcoins cannot possibly be likely to uncover hidden bitcoin assets. If you have any suspicion that your spouse might be hiding assets, make sure your lawyer knows the bitcoin system and how to discover hidden bitcoin assets.