Divorcing spouses are hiding millions of dollars of crypto from each other — and NFTs are increasingly involved too

• Cryptocurrencies are an increasingly common way for divorcing spouses to hide money from each other. 
• One investigator said he's dealt with several divorce cases with crypto worth more than $10 million.
• Even NFTs — digital pieces of art tied to a blockchain — are getting caught up in the trend.

Crypto is the new "Cayman Islands bank account" for spouses hiding money in the midst of a divorce. 

Cryptocurrencies, which are digital assets tied to blockchain technology, are already an effective tool for hiding funds, crypto investigator Paul Sibenik said. And that makes them the perfect match for sly spouses in a divorce.

Sibenik, who is a lead case manager for blockchain investigation agency CipherBlade, said the amount of crypto divorce cases the firm handles has "grown considerably." When he started at the firm in 2019, he said the agency wasn't focused on investigating hidden crypto in divorces, and now those scenarios make up about 15% of CipherBlade's caseload. 

"I was the first person — well, maybe one of the first people — to realize the potential that cryptocurrency had," Sibenik said. "I guess I'm right because given the number of cases that we have, it seems to be increasingly common."

Several cases, Sibenik said, have dealt with crypto stashes worth more than $10 million. Those assets, he said, don't "show up on bank statements."

The lack of a central authority, like a government or company, in charge of crypto has given the asset class a reputation for being elusive. But in reality, crypto's movements are easily trackable because every transaction is recorded on a public ledger called a blockchain, and investigators are becoming increasingly savvy at cracking tough cases. Take the US Justice Department's largest-ever bitcoin seizure, worth $3.6 billion, last month from the 2016 Bitfinex hack, for example. 

Sibenik said in crypto divorce cases the legal process, not the investigative one, is the "cumbersome" aspect. In some instances, he said spouses have played the I-didn't-know-I-had-to-disclose-that card. In other cases, they deny, deny, deny, until the evidence is overwhelming. 

Even NFTs, which are digital pieces of art tied to the blockchain, have gotten caught up in a couple's split. Though the concept is still relatively new, Sibenik said the number of undisclosed NFTs in divorces is growing. Compared to digital currencies, though, NFTs are harder to price.

"It's not that they can't be valued; it's just that value is a bit more unclear, whereas with Bitcoin, for example, the value is fairly clear," he said. "With the NFTs you have to look at what comparable assets have sold for, what it has sold for in the past in order to try and value it."