• Crypto hunters are being hired to find undisclosed crypto assets in divorce proceedings
  • One woman discovered that her husband had $500,000 worth of Bitcoin hidden in an undisclosed wallet
  • Crypto investments are proving to be challenging in divorce due to valuation, among others

Crypto investments have raised many issues around the safety and security of the funds, but the most recent alarm bell rang in divorce as reports emerged about some spouses discovering previously undisclosed crypto stashes with the help of crypto hunters.

"They're calling us because they want to get us appointed as the neutral forensic cryptocurrency expert to marshal and account for the party's crypto assets and track down any undisclosed crypto assets that one party may have," New York-based forensic investigator Nick Himonidis told CNBC.

Such was the case of financial infidelity with Sarita, who asked to use a pseudonym when speaking to the outlet to protect herself from retaliation.

"It was never even a thought in my mind, because it's not like we were discussing it or making investments together... it was definitely a shock," Sarita told CNBC after she discovered 12 Bitcoins owned by her husband during their divorce proceedings.

Sarita tapped a forensic accountant to help her track down the Bitcoin that was then worth $500,000. The digital assets were stored in a previously undisclosed crypto wallet.

Divorce proceedings that involved hunting for secret crypto stashes allowed for the establishment of a new job category of forensic investigators: crypto hunters.

Himonidis reportedly said crypto asset forensics is one significant part of their practice and a fast-growing one, adding that around 25% of his divorce-related cases involve some sort of cryptocurrency.

Divorce attorney Kelly Burris said she sees crypto requests in discovery in about 40% to 50% of cases she's handled, as per the outlet. The Austin-based attorney also shared that it can be "somewhat easy to hide" crypto assets if there's a non-tech-savvy spouse in a marriage.

Kim Nutter, a family and marital law attorney, said she thinks the law "is trying to catch up with this novel form of currency," according to CNBC. In Florida, where Nutter's practice is based, crypto was only recently added to the standard request for document production.

Veteran forensic accounting field worker Mark DiMichael reportedly noted that if a spouse can prove that there is existing crypto or that stored crypto has not been sold, a court can issue an order to have the funds retrieved.

In divorce proceedings where marital assets are divided, significant challenges are also expected when spouses have non-fungible tokens (NFTs) or metaverse investments in their investment portfolio, as per Finbold.

Furthermore, a divorce can also get complicated even if a couple is transparent about their investments due to the volatile nature of cryptocurrencies, Insider reported.

In November 2022, multiple outlets reported about the divorce of Francis and Erica Desouza, the first known "Bitcoin divorce." Three years of battling in court found that Francis did not appropriately disclose his cryptocurrency stash.

Francis was ordered to pay his wife more than $6 million worth of his Bitcoin.

Illustration shows representation of cryptocurrency Bitcoin, Ethereum and Dash plunging into water
Cryptocurrencies like Bitcoin are starting to weigh heavily on divorce. Reuters