How to Find Out if Your Spouse is Hiding Bitcoin or Cryptocurrency
Cryptocurrency is here to stay, and it’s a reality that has impacts in every industry as institutions adopt blockchain, businesses hold bitcoin on their balance sheets, and regulators are creating clarity for cryptocurrency businesses.
The legal and divorce industry is affected as well. Over half of American Millennial men own cryptocurrency. Further, the average duration of marriage before divorce is 7-8 years, and top cryptocurrencies have appreciated nearly 50x in that time.
Are you wondering if your spouse might have cryptocurrency in your divorce case? We’ll go through the simple ways that you can check.
Establish if there is cryptocurrency
Before we can dig into values & amounts, we simply need to know if your spouse did, in fact, have any cryptocurrency.
Ask
The first thing to do is the simplest: Just ask them. Cryptocurrency is required to be revealed in financial discovery documents as part of a divorce case. Whether they’re being deceitful or if they didn’t understand that cryptocurrency is a marital asset, asking is the easiest start. Don’t worry about “spooking” them, all on-chain transactions are public, and if they move to sequester away funds, it will be revealed later and added to your judgment.
Search Traditional Financial Statements
If they aren’t collaborative after asking, the next step is to check your traditional financial documents.
Most cryptocurrency is purchased through exchanges, basically a bank for cryptocurrency. These exchanges show up on your bank statements. You can find a list of all of the top ones at (BLOG POST), but the top cryptocurrency exchanges for customers in the USA as of the time of writing are:
Coinbase
Binance
Kraken
Gemini
RobinHood
PayPal + Venmo
Block + Cash App
Also, a lot of cryptocurrency services use third parties to process credit & debit cards. The top USA services that facilitate cryptocurrency transactions are:
Moonpay
Ramp
Transak
Banxa
Simplex
Wyre
Wise (formerly TransferWise)
Go through your traditional bank documents. If these services are coming up with notes or descriptions regarding cryptocurrency, then you’ve found a thread to pull.
Subpoena
If you’ve found transactions above, you’ll want to subpoena the organization in question.
If your spouse did not disclose crypto and you still did not find any transactions, you can still subpoena the top USA exchanges to see if any accounts are linked with your spouse.
Just like the discovery documents, cryptocurrency exchanges are subject to all of the same Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations as traditional banks. This means that they are subject to subpoena and keep documents to support law enforcement and legal professionals.
To subpoena an exchange, you simply need to look up their registered agent; as most of their centralized corporate headquarters are not responsible for subpoena responses.
To find their registered agent, go to your state or jurisdiction’s secretary of state business registry portal. Search for the name of the exchange, and it should produce their business listing, complete with their local registered agent. This is the organization, individuals, and mailing address that will service your subpoena.
Review Transactions
Whether you have a list of transactions from a collaborate spouse or whether they required a subpoena; you’re ready to get answers once you have a transaction list.
Many people stop when they see a financial statement from a cryptocurrency exchange, but this is exactly how many bad actors trick spouses and lawyers. They willfully turn over tax documents and balance statements, but they intentionally withhold the transaction logs. This is because they can move cryptocurrency from the exchange into a private wallet, where the bad actor maintain access to their digital assets.
So, first, we need transactions.
Once you have the transaction sheet, you’ll look for a transaction type of “send” or “withdrawal.” The terminology changes based on what exchange you’re working with, but they all use natural language.
Sometimes, withdrawals can be cash-outs to their checking account or other internal transfers, which aren’t of interest to us in this case. We’re looking for “on-chain” withdrawals, meaning the assets were either sent to another exchange or to a private wallet.
Reveal the Transaction on a Block Explorer
To find on-chain withdrawals, there will either be a “transaction hash” or a “recipient address” field, with a long chain of characters. Here is a sample transaction hash for a withdrawal on the Ethereum blockchain: 0x345caa93ac044c9914041e037e66dd2e16c874e16f8457124c4616d74e4b5954
When you find a transaction like this, you’re on to something. Now, we just need to see the transaction, which requires a block explorer. The next thing you’ll do is look up what blockchain the withdrawal is on.
Your transaction log will definitely have a token name and might have a blockchain name. Simply search what they give you with “Block explorer.” In our example, we’re using Ethereum, so you’d search “ethereum block explorer,” and land up on a service like Etherscan.
🧱 Side Note: token names don’t always reveal what blockchain they are on. For instance, USDC can be on Ethereum, Base, Avalanche, Ripple, Stellar, and many other blockchains. If you can’t find the blockchain, give us a call and we’ll take a look.
Last, all you need to do is copy-paste your transaction hash or your recipient address into Etherscan, and it will show you the transaction and recipient wallet.
Identify Recipient Wallets or Services
The last thing is to see if the assets moved from your exchange to a private wallet or to another exchange or third party. Etherscan labels wallets, so if your search reveals “Sender: Coinbase, Recipient: Binance,” then your subject is sending money from one exchange to another, and now it’s time for another subpoena.
If your search reveals “Sender: Coinbase, recipient: (long wallet address, example 0x388C818CA8B9251b393131C08a736A67ccB498216)”, then your subject is withdrawing assets on-chain to a self-custody wallet.
Conclusion
You did it! Anyone can use these tools to trace assets on-chain. That said, if you find undisclosed wallets or undisclosed exchanges via this process, we recommend engaging a professional. While asset tracing can be done by anyone, the stakes are high, and a single missed connection or undiscovered blockchain could mean tens or hundreds of thousands of dollars remain hidden. We would love to provide this service if needed, but any digital asset forensic investigator can help you; but for your client’s sake, a professional engagement is the best practice.
