Skip to main content

As a famous drug-addicted television doctor once said at least once an episode, everybody lies. And corollary to the House Doctrine could have been: especially to their spouses/partners/loved ones. And, apparently, especially about matters monetary: Nearly a third of couples have at least one member buying things secretly, while others prefer to secretly drain savings, hide debts, lie about their income or keep accounts just to themselves.

These latter two seem especially common among couples whose relationship is breaking down and headed for divorce, as assets unknown by the other partner are assets half of which cannot be taken by the other partner. Given their reputation for being all secretive and untraceable, then, it makes sense that cryptocurrency hordes would be a popular financial infidelity among those dealing with divorce.

Of course, crypto’s not quite as untraceable as it quietly would like you to think and, well….

Some divorce lawyers have come to rely on a growing industry of forensic investigators, who charge tens of thousands of dollars to track the movement of cryptocurrencies like Bitcoin and Ether from online exchanges to digital wallets. The investigative firm CipherBlade has worked on about 100 crypto-related divorces over the last few years, said Paul Sibenik, a forensic analyst for the company. In multiple cases, he said, he has traced more than $10 million in cryptocurrency that a husband hid from his wife.

Still, they’re gonna try.

In interviews, nearly a dozen lawyers and forensic investigators described divorce cases in which a spouse — usually the husband — was accused of lying about cryptocurrency transactions or hiding digital assets…. In some divorces, the cryptocurrency stash turns out to be tiny or even nonexistent. Several lawyers described cases in which a wife’s suspicions were unfounded. But over and over, said Kelly Burris, a divorce lawyer in Austin, Texas, who primarily represents husbands, men have come into her office and detailed their plans to hide cryptocurrency.

“They can be weirdly not creative,” Ms. Burris said. “They’ll be like, ‘I’ll give it to my brother for a dollar’ or whatever, and I’m like, ‘You can’t do that.’”

Anyway, you can understand why people would be so desperate to get their hands on their fair share of the bitcoins and such. After all, Larry David says they’re great, even if he doesn’t understand the first thing about them. And, I mean, just look at what you can do with them.

Sales of NFTs, or non-fungible tokens, soared to around $25 billion in 2021, leaving many baffled as to why so much money is being spent on items that do not physically exist and which anyone can view online for free…. [Cent CEO Cameron] Hejazi highlighted three main problems: people selling unauthorized copies of other NFTs, people making NFTs of content which does not belong to them, and people selling sets of NFTs which resemble a security.

He said these issues were "rampant," with users "minting and minting and minting counterfeit digital assets."

Early on, [NFT marketplace OpenSea] relied on an approval process to combat abuse. But it rolled back those requirements last March, just days after an NFT of an image by an artist called Beeple sold for $69 million via Christie’s, accelerating a surge in trading. The company has thrived financially since the change. Measures it implemented subsequently were quickly removed after users complained.

OpenSea’s review system was overloaded with interest following the sale, in part because its software let people make unlimited numbers of NFTs for free. In response to the flood of new NFTs being created, the company decided to make all NFTs on the site easily available to buyers without being checked for problems like plagiarism or fraud.

Officials at Her Majesty’s Revenue and Customs say they seized the NFTs during an investigation into a suspected value-added tax (VAT) fraud case worth £1.4 million ($1.9 million). Three suspects have been arrested on suspicion of attempting to defraud the taxman.

And now for the obvious punchline:

“I was really amazed with all the sculptures and paintings,” [NFT collector Felix] Xu said in an interview, crediting [Art Basel Miami Beach] with expanding his interest from blue-chip modernists like Picasso toward living artists like Nigel Cooke and Jessie Makinson…. Among the NFT collectors roaming Miami Art Week was an anonymous crypto collector, known as Pete D., who bought a 1950 tapestry by Le Corbusier from Boccara Gallery before posting about “the weird and wonderful world of top-tier physical art collecting,” on his blog….

“In the last three or four months, we have seen a greater interest in physical art from NFT collectors,” said Charles Stewart, [Christie’s] chief executive, explaining that new collectors craved the context for their digital creations that art history could offer.

Yea, we’re sure that’s exactly what it is.

Divorcing Couples Fight Over the Kids, the House and Now the Crypto [NYT]
Larry David Doesn’t Get Crypto. That’s Why He’s the Perfect Pitchman. [NYT]
NFT marketplace suspends most sales, citing 'rampant' fakes and plagiarism [CNN]
OpenSea’s NFT Free-for-All [WSJ]
British authorities just seized NFTs for the first time, in a £1.4 million fraud probe [CNBC]
After Pak and Beeple, What’s Next for NFT Collectors? Art Made With a Paintbrush [NYT]
Survey: 30% Have Dealt With Financial Infidelity [U.S. News & World Report]

For more of the latest in litigation, regulation, deals and financial services trends, sign up for Finance Docket, a partnership between Breaking Media publications Above the Law and Dealbreaker.

Related

munch-scream-bitcoin-tall

Of (Bogus) Love And (Fake) Money

The perils of romance and cryptocurrencies.

litecoin

If You Believe Walmart Is About To Begin Accepting Litecoin, Well, I’ve Got Some, Uh, Litecoin To Sell You

The old is new again and again and again. And Steve Cohen and Cathie Wood want more of it.

gamestop

SEC Drags GameStop Wash Traders For Dirty Deeds

There was at least one thing you allegedly couldn’t do during the madness.

By Mike Cauldwell (https://www.casascius.com/photos.aspx) [Public domain], via Wikimedia Commons

Did You Know Cryptocurrencies Were All About Helping The Unbanked?

In fairness, the executives saying so probably didn’t know it until they needed to come up with a catchy thing to say at a Congressional hearing.

By Mike Cauldwell (https://www.casascius.com/photos.aspx) [Public domain], via Wikimedia Commons

Miami Bitcoin Faithful Feeling Better Than Miami Crypto Investors

No news is good news and oh look here’s Mark Zuckerberg again to ruin everything.

By Jdarsie11 [CC BY-SA 4.0 ], from Wikimedia Commons

The Mooch Has Big, Fake Things To Announce As His Less-Big-Than-Usual Party

The highlight of this year’s SALT conference make by Skybridge’s latest attempt to lose money in crypto.

By Mike Cauldwell (https://www.casascius.com/photos.aspx) [Public domain], via Wikimedia Commons

Report: Things More Or Less Perfect For Money Laundering Used To Launder A Lot Of Money

Decentralized finance and cryptocurrency are a criminal’s perfect match.