Cryptocurrency and the Dissipation of Marital Assets in IL

 Posted on May 16, 2025 in Divorce

Cryptocurrency is a type of digital currency that allows people to make payments to one another through an online system. There is no legislated or even intrinsic value in cryptocurrency – it is worth what people are willing to pay. Undoubtedly, cryptocurrency is one of the hottest investments, even though some investors are not entirely sure how it works. The projected revenue in the cryptocurrency market worldwide is expected to reach 45.3 billion in 2025, and the number of cryptocurrency users is expected to reach 861 million.

Illinois is an equitable division state, which means that marital assets are divided fairly, although not necessarily equally. Under the Illinois Marriage and Dissolution of Marriage Act (IMDMA), virtually all assets gained by either spouse after the marriage occurs are considered marital property, subject to equitable division during a divorce. The only time cryptocurrency would be considered non-marital property is when one spouse purchased it before the marriage or purchased it with inherited funds.

If this is the case, the spouse claiming non-marital property has the burden of proof to show that cryptocurrency is not a marital asset. Unfortunately, cryptocurrency is very easy to hide as a marital asset, and it can be difficult to prove that it has been used to dissipate marital assets. If you are going through a divorce and you believe your spouse purchased cryptocurrency without your knowledge or approval, and then used those funds for items that were definitely non-marital, you need to speak to a knowledgeable Wheaton, IL divorce lawyer.   

What is the Dissipation of Marital Assets?

When one spouse intentionally depletes, wastes, or misuses marital funds or property for purposes unrelated to the marriage, during the breakdown of the marriage, this is known as the dissipation of marital assets. Some examples of the dissipation of marital assets include:

•  Transferring marital assets to third parties or family members to avoid splitting them during a divorce
• Spending marital funds on extramarital affairs, including trips, gifts, or apartments for someone other than a spouse
•  Spending marital funds on excessive gambling, shopping, or a drug or alcohol habit
• Making reckless financial decisions using marital funds without telling the other spouse
• Selling marital property below market value without the consent of the other spouse
• Buying large quantities of cryptocurrency with marital funds, then hiding those purchases from the other spouse

How Can Cryptocurrency Be Hidden and Dissipated?

The very nature of cryptocurrency makes it easy to hide. If the other spouse knows of the existence of the cryptocurrency, then the spouse who purchased it has the burden of proof to show it was not purchased with marital assets. In one case, a wife argued that her cryptocurrency accounts were funded with premarital money, albeit during the marriage.

Since the wife had no records that supported this argument, the court ruled that the crypto accounts were marital property. Illinois courts are likely to consider cryptocurrency marital property absent any evidence to the contrary.

Disclosure Obligations Regarding Cryptocurrency

Illinois statute mandates full financial disclosure from each spouse, including all digital assets. Each party must file a Financial Affidavit that lists all assets and liabilities under oath, and this affidavit explicitly requires disclosure of digital assets. Providing false information can constitute perjury or sanctionable misconduct.

That said, cryptocurrency can be difficult to trace and tie to asset dissipation, thanks to a lack of third-party records. A determined spouse can obscure a digital trail through peer-to-peer exchanges, Bitcoin ATMs to buy crypto anonymously with cash, or platforms like LocalBitcoins, which facilitate private sales with minimal records.

Contact a DuPage County, IL Divorce Attorney

Given the technical complexity, expert witnesses and forensic accountants may be necessary to sort out cryptocurrency purchases or dissipation during divorce. A knowledgeable Wheaton, IL divorce lawyer from Mirabella, Kincaid, Frederick & Mirabella, LLC will be an invaluable resource. MKFM Law serves family law clients at offices in Kane County, DuPage County, and DeKalb County. Call 630-665-7300 to schedule an initial attorney meeting.