At the recent AAML/BVR National Divorce Conference, this question was asked: On your client intake forms, do you have any questions about cryptocurrency? Only a very few hands were raised. Questions that need to be asked include: Do you hold any cryptocurrency? Do you believe your spouse holds any? Often, the attorney or analyst will have to ferret out this asset, and the first place to look is tax records, says Dorothy Haraminac (GreenVets). The first page of the Form 1040 asks about it, but that’s just for the current year, so that’s just a starting point. Other forms that could reveal crypto are Form 8938 (foreign assets), Form 8949 (capital gains/losses), Form 8283 (Schedule A, contributions), and Form 1099 Misc (for payments and receipts).
Another place to look is the public blockchain, she advised. Cryptocurrencies are not completely anonymous, and anybody can access the information on the internet, which is the “authoritative source” for this. Cryptocurrencies are publicly reported on online blockchain ledgers that identify users solely by their cryptocurrency addresses, which look like long strings of numbers and letters. There is no personally identifying information, such as names and locations. Therefore, the question for the client is: What are your addresses?
Session co-presenter Ed Kainen (Kainen Law Group) asked whether traditional financial records can reveal cryptocurrency. Yes, absolutely, Haraminac responded. Old-fashioned statements from the bank, credit card issuers, and investment advisors can reveal crypto transactions. You also may find something in the client’s employment agreements, she noted. She also advised bringing in a crypto specialist, if necessary, as the techniques for investigation are still evolving.