General Crypto Currency world

Miket12

Warriors 1st Grader
Apr 20, 2012
10,400

The bitcoin strategy divorcing spouses use to hide assets​

Most people's to-do list for getting married doesn't involve investing in Bitcoin.

But for one 29-year-old ready to express his love for his partner, buying the cryptocurrency was one of the first things that came to mind.

"I have about 50k cash now and hope to collect another 50k between now and when we actually marry," he posted on Reddit.

"I plan to convert this into crypto but wanted to check if this is a safe option in the event of a divorce. Would the court be able to locate these assets?"

"I don't intend to divorce at any point, but life happens. My parents were in love for 20 years and that s--- still went downhill when I was a teen."

His thinking is far from romantic, but ask any divorce lawyer what they make of his dilemma and they will argue that he is on to something.

Ayesha Vardag, nicknamed Britain's "Diva of Divorce", says she has seen a five-fold increase in divorce inquiries mentioning cryptocurrency since 2017.

"It can feel like a cat and mouse game with increasingly sophisticated techniques being used by parties to hide their true wealth during divorce proceedings," she says.

"In the same way that offshore trusts and investments have been used as tools to facilitate hiding assets, Bitcoin and other cryptocurrencies can be used to hide your spouses' true worth.

"As cryptocurrencies become more established they will undoubtedly enter mainstream divorce proceedings."

Cryptocurrencies, such as Bitcoin, have become popular among certain groups because they are held in a "digital wallet" and transactions are hard to link back to an individual.

For those in the midst of a divorce, they can prove a valuable tool for masking wealth.

The pandemic has left already strained relationships on the brink. After working hard in retail and as a food courier throughout the pandemic "putting our family in danger", one mum of two wrote on Reddit that she is furious after finding out that her husband is a secret millionaire from investing in cryptocurrency. "I feel my sanity is wrecked," the 31-year-old wrote. "Is there a reason to even stay?".

Harriet Errington, a lawyer for Boodle Hatfield, believes that Bitcoin divorces are "going to become a massive issue" and fears that courts used to traditional ways of unearthing hidden wealth could be ill-equipped. "The family court is quite old fashioned I suppose, imagine a fuddy duddy judge faced with one of these issues? [Bitcoin] could be worth hardly anything or could be worth a fortune depending on the date of valuation," she says.

"[But] more and more people are going to buy into it. It's such an obvious way for people who want to hide money from their partner to do that. Divorce is the biggest threat to anyone's wealth." Obscuring wealth in digital coins is less popular in cases of large-scale asset hiding, Vardag adds. For the ultra-rich with serious amounts of money to hide, the risks offset the potential rewards.

The highly volatile nature of cryptocurrency means the value of the asset could be wiped out overnight. As one Reddit user puts it after a massive loss: "I've been investing in Bitcoin to hide money from my soon to be ex-wife. I swear, this s--- is more stressful than the impending divorce."

The last few weeks have offered inexperienced investors a strong reminder of how volatile Bitcoin is, with Tesla tycoon Elon Musk and Chinese regulators triggering sell-offs that have taken total losses to more than 40pc since April's highs.

The flagship cryptocurrency and its rivals swung wildly last Wednesday as a Chinese ban on trading triggered fears that the bubble could be about to burst. China is one of the biggest markets for cryptocurrencies, with about two thirds of all cryptocurrency mining power coming from Chinese data centres.

Like many regulators, Chinese officials are concerned about the potential losses investors could be exposing themselves to. Days earlier, Bitcoin had slumped to its lowest price since February after Musk, one of its most high profile supporters who announced earlier this year that the company had invested US$1.5bn in Bitcoin, implied that the electric carmaker could sell its crypto holdings.

He had also knocked nearly US$10,000 off the price of the cryptocurrency only a week earlier, after announcing that Tesla had stopped accepting Bitcoin as payment for its cars due to concerns about its carbon emissions.

"Most people are wary about investing substantial proportions of their wealth in cryptocurrencies," Vardag points out. "If Bitcoin and other cryptocurrencies stabilised, leading to individuals investing larger proportions of their wealth in these assets, we would expect then to see this filter through to other aspects of life including divorce proceedings."

But a technologically savvy spouse could hide cryptocurrency easily during a divorce battle, argues Texas-based divorce lawyer Kelly Burris.

"I have not seen any attorneys, other than myself, request information regarding cryptocurrency in a divorce action and the rule often tends to be, if the other side doesn't ask, you may not have a duty to disclose," she says.

Suspicious partners should avoid turning detective, however. "It can be tempting to hack into emails or rifle through filing cabinets, but there are strong penalties for doing that," warns Errington. "It's hard as it's tempting to open people's mail or hack into their emails and do some detective work but that's not sanctioned by the court."

As Bitcoin is used increasingly as a strategy to conceal wealth, lawyers will be racing to stay ahead of the game.

It is not just spouses that people are hiding money from. "I have a friend who has been dealing with crypto for several years and his parents have no idea," writes one Reddit user.

"They give him pocket money and he is a millionaire."

- Telegraph Media Group

 

Kestrel84

Rippin' and a Tearin'
Contributor
Aug 26, 2017
770
Auckland
It has been savage, but also to be expected. There had to be a correction at some point - if you think about how high BTC got in the last 12-18 months, even now it is still massively up.

But as always, don't invest what you can't afford to lose.
 

Navigator

Christchurch Born n bred white bait fed.
Contributor
May 19, 2012
2,290
Brisbane Queensland Australia
Hope u are all still hanging in there Crypto Warriors.
Spent a fair chunk the last couple of weeks accumulating more ada, coti and vet.
Hopefully will continue to till end of June.
 
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Tim burgess

1st Grade Fringe
May 20, 2012
1,365
I've got a nest egg with my partner. We are pumping it onto our record label which we are establishing.

However, don't want the to be ex getting her hands on it. It's not a fortunate but its a great base for my partner Deborah to lauch her South East Asia record label.
 

wizards rage

1st Grade Fringe
Apr 18, 2016
4,553
Tauranga
I know economist have correctly predict 18 of the last 7 crashes but:

‘The man who famously made $20 billion by betting against the U.S. housing market when subprime mortgage bonds blew up says that he sees another obvious, massive collapse coming: crypto.

“Cryptocurrencies, regardless of where they’re trading today, will eventually prove to be worthless,”


 

tajhay

Negative Nancy
Mar 30, 2012
10,457
Sydney
Tokens/ coins with actual means to work will always be there, meme tokens maybe not so
Yeah I'm not sure economists who predict that all crypto will be worthless understand the tech like blockchain or smart contracts. Good luck to them if they want to bet against it. Would be interested to hear some of those who are predicting it will be worthless are doing so with their own cash.
 

wizards rage

1st Grade Fringe
Apr 18, 2016
4,553
Tauranga
Yeah I'm not sure economists who predict that all crypto will be worthless understand the tech like blockchain or smart contracts. Good luck to them if they want to bet against it. Would be interested to hear some of those who are predicting it will be worthless are doing so with their own cash.
Property and shares. Plus reinvestment into my own business. Boring I know.

Fundamentally they are underpinned (and valued) by their ability to generate a profit as a return on the investment as opposed to a capital gain. A capital gain is a bonus not the aim…
 

Tim burgess

1st Grade Fringe
May 20, 2012
1,365
The difference with cryptocurriences is that it's a quicker way of transfer money, which has its benefits to businesses.

Hence, it could well have longevity
 

wizards rage

1st Grade Fringe
Apr 18, 2016
4,553
Tauranga
The difference with cryptocurriences is that it's a quicker way of transfer money, which has its benefits to businesses.

Hence, it could well have longevity
Maybe. But as an investment you spend money today to buy passive income in the future. Your buying the income income generating ability of the asset. That is how it has a real world worth that underpins it’s value.

It’s not reliant on someone buying it at a higher price some time in the future. It can’t crash if it’s supported by its maintainable earnings.

In the 1990’s I collected telephone cards with my Nana. Similar to crypto, it rocketed up in value. Except it wasn’t an investment, it was just an appreciating asset. Phone cards had its uses, just like crypto, until technology changed and they became irrelevant and are now basically worthless.
 

Miket12

Warriors 1st Grader
Apr 20, 2012
10,400
Cryptocurrencies: Developing Countries Provide Fertile Ground

Sometimes dismissed as a fad in advanced economies, crypto holds more appeal in countries with a history of financial instability.


In Lagos, Nigeria's commercial capital, a software coder bills her client in London and is paid in bitcoin, sidestepping a costly banking system and the naira currency's miserly official exchange rate. In São Paulo, Brazil, a dentist puts his monthly savings into an exchange traded fund investing in a basket of cryptocurrencies that is the second most popular ETF on the local bourse. Individuals and businesses in Vietnam invest, trade and transact so much in bitcoin and other cryptocurrencies that the south-east Asian nation has the world's highest rate of crypto adoption.

In advanced economies, cryptocurrencies are viewed by many in the financial world with suspicion — the domain of zealous "crypto bros" and a speculative and highly volatile fad that can only end badly. Regulators in Europe and the US have issued stark warnings about the dangers of trading crypto.

But in the developing world, there are signs that crypto is quietly building deeper roots. Especially in countries which have a history of financial instability or where the barriers to accessing traditional financial products such as bank accounts are high, cryptocurrency use is fast becoming a fact of daily life.

"While everyone was paying attention to [Tesla chief executive] Elon Musk's tweets, and which institutional investor or CEO was saying what they thought about bitcoin, there was this entire story unravelling in emerging markets around the world that's really powerful," says Kim Grauer, director of research at Chainalysis, a leading data company in the sector.

"There's a massive crypto footprint in many of these countries . . . [and] a massive amount of entrepreneurial opportunity."

Chainalysis ranks Vietnam first for crypto adoption worldwide — one of 19 emerging and frontier markets in its top 20, with only the US among advanced economies making an appearance at number eight in 2021. "It's very striking this year, [adoption] is a story of emerging and frontier markets," adds Grauer.

Separate data from UsefulTulips.org, tracking bitcoin transactions on the world's two biggest peer-to-peer crypto trading platforms, show that in the past few weeks, sub-Saharan Africa has overtaken North America to become the geographical region with the highest volume of this kind of crypto activity.

On Tuesday, the small central American nation of El Salvador — population 6.4m — will become the first in the world to make bitcoin legal tender, meaning merchants from car dealers to coffee shops will be obliged to accept it as payment. The project faces the scepticism of the IMF, among others. But some view it as groundbreaking.

"We should take it very seriously," says Paul Domjan, co-author of the 2021 book Chain Reaction: How Blockchain Will Transform the Developing World. "It changes the position of bitcoin in the [global financial] system and it accelerates the whole debate about digital currencies."

An alternative to weak currencies​

Emerging markets are fertile ground for cryptocurrencies, often because their own are failing to do their job. As a store of value, as a means of exchange and as a unit of account, national currencies in some developing countries too often fall short.
Unpredictable inflation and fast-moving exchange rates, clunky and expensive banking systems, financial restrictions and regulatory uncertainty, especially the existence or threat of capital controls, all undermine their appeal.

Nigeria, Africa's most populous country, is a case in point. Its impatient, youthful population has to contend daily with high unemployment, the vagaries of black market currency exchanges and capital controls. As the price of oil, the country's main export, dropped during the pandemic and further squeezed dollar supply, many businesses were unable to pay foreign suppliers and lenders, almost leading to the default of a World Bank-backed power plant that provides a tenth of Nigeria's electricity. For individuals sending or receiving remittances or billing customers, the lack of dollars is a constant headache.

"When you touch boots to the ground in Africa, specifically Nigeria, and talk to people about their everyday challenges with money, you see that it is almost unfathomable to us in the west to imagine," says Ray Youssef, chief executive of Paxful, a peer-to-peer crypto exchange that allows users to trade directly with one another. In these transactions, bitcoin are held in escrow accounts by the platform until the payment clears — whether by bank transfer, mobile money or gift card.

A third of the company's users are in Africa, and Nigeria is its biggest market, the company says, with 1.5m users — an 83 per cent increase in the year to June. Peer-to-peer rival LocalBitcoins also has most of its customers in developing markets in Latin America and Africa, as well as Russia.

Transactions vary in size, from retail investors buying small amounts of crypto for under US$100, to merchants settling invoices, to financial services businesses that have been built on these platforms and employ rosters of people. "There's a lot of commerce happening between China and Nigeria, importing of goods using cryptocurrency, because the foreign exchange policy has locked out the everyday entrepreneur who doesn't have a massive amount of money to get into international trade," says Grauer.

In countries such as Venezuela and Brazil, the cost and bureaucracy of legacy financial systems means many people are more comfortable experimenting with and switching between different cryptocurrencies.

"We thought that people would adopt one cryptocurrency and that would be their primary one, and what we have found instead is they use different ones for different purposes," says Ryan Taylor, CEO of Dash Core Group, a cryptocurrency network that first entered Venezuela in 2016. Coins such as Dash get used more for smaller purchases, bitcoin for larger ones because of higher fees, and litecoin for things like paying satellite bills, he says.

The big exchanges such as Binance and Coinbase still dominate crypto services throughout the developing world. In Latin America, central and south Asia and Africa, more than 80 per cent of cryptocurrencies by value sent to these regions moves through exchanges. Binance sent over US$14 billion worth of crypto to eastern Europe in the year to June 2020, accounting for 20 per cent of all funds sent through the exchange globally. It was also the exchange of choice in Latin America, sending more than US$3 billion in crypto to the region over the same period.

It also offers an alternative to traditional remittances, a crucial lifeline for many developing economies. Transferring money back and forth across borders through traditional channels such as Western Union can be prohibitively expensive.

"If you want to send money to the African country next door, it's a veritable nightmare, and sending money outside of Africa — to America, Europe, China, whatever it may be — is almost impossible unless you are rich," says Youssef.

According to the World Bank, the cost of sending US$200 to countries in sub-Saharan Africa averaged 9 per cent of the transaction value in the first quarter of 2020, the highest of any world region, and can go into double digits in some places.

On peer-to-peer crypto networks, however, these fees are typically about 2-5 per cent, according to LocalBitcoins. Average transaction fees for bitcoin were below US$3 in August 2021, according to data provider BitInfoCharts, while for ethereum they ranged between US$8 and US$44 over the same period.

But some observers believe there are considerable dangers in cryptocurrencies being used for remittances or other payments.

Paola Subacchi, professor of international economics at the University of London's Queen Mary Global Policy Institute, says a better solution for migrant workers would be to reduce the cost of remittances. "This is a bad remedy for a problem that should be solved using technology we already have."

She adds: "Cryptocurrencies and crypto companies present themselves as instruments for financial inclusion, but those excluded from traditional financial facilities are precisely those who can least afford to take any risks with their money."

More mainstream investment​

As with peers in advanced economies, there is plenty of speculative fervour in parts of the developing world about bitcoin - especially in middle-income countries.

Yet crypto investment has already made greater inroads into the investment mainstream in some emerging markets than it has in advanced ones.

In the US and the UK, for example, regulators have yet to approve the creation of cryptocurrency ETFs, which allow investors to gain exposure to the potential gains and losses of bitcoin and others without directly owning any themselves. Brazil this year became one of only a handful of countries where cryptocurrency ETFs are available.

Hashdex Asset Management has launched three regulated crypto ETFs on the São Paulo stock exchange this year, which together have over 160,000 investors.

Its flagship fund, HASH11, tracks an index co-developed with Nasdaq based on a basket of crypto assets. Charging a 1.3 per cent management fee, it currently has net assets of R$2.17 billion (US$421 million), and is the second-most owned ETF on the bourse.

Marcelo Sampaio, Hashdex chief executive, describes its customer base as "the mainstream financial market".

"It's the whole range from the largest institutional investors in the country to the smallest average Joe investors in the stock exchange," he says.

Hashdex continued to attract new investors during downturns in the crypto market, such as recent dips provoked by Tesla's decision to no longer accept bitcoin payments and China's crackdown on crypto mining. "What that shows is that even with a severe correction in the market they were investing long-term," Sampaio says.

Brazil is the leading country in Latin America for cryptocurrency users, with 10.4 million people, according to analysis by TripleA, a Singapore-based provider of crypto payment solutions.
Crypto's growing popularity in Brazil is demonstrated by local exchange Mercado Bitcoin, whose total transaction volumes were up sevenfold by the end of August compared with 2020. The company recently secured a US$200 million investment from the Japanese technology group SoftBank and its customers have doubled to 2.8 million in the past year.

"In Brazil, almost all activity is related to investments and trading," says Daniel Cunha, a Mercado Bitcoin executive. "[But] in Argentina, stable coins have a very important presence as a strategy to defend [against the changing] value of the currency. In Mexico, the use of crypto for remittances represents a very large part of the market."

Leapfrog to blockchain​

The speed with which many developing countries have taken to crypto is not the first example of such early-adopter behaviour.

Perhaps the best-known modern example is M-Pesa, a mobile payment system first developed in Kenya that allowed millions of people without bank accounts to make cash withdrawals and deposits, transfers and payments through their mobile phones, delivering financial inclusion through technological innovation.

To some enthusiasts of the new currencies, the spread of crypto is the first stage in the next great leap, as users get used to trusting the so-called distributed ledger technology (DLT) of which blockchain — the backbone of crypto — is one application.


In Chain Reaction, Domjan and his co-authors note that institutions of trust, including the holders of public records such as land registries and licensing agencies, tend to be weaker in the developing world. And, they argue, where you see such weaknesses, it is easier for DLT or blockchain-based systems to be "good enough" to offer an attractive alternative.
"It seems rational to expect such innovation . . . to have the biggest impact in developing countries," they write.

Domjan says such applications could unlock a host of "dead capital" to feed investment and growth.

Warnings of instability​

While crypto acolytes are excited about El Salvador's bitcoin currency experiment, most regulators have greeted it more frostily.

After El Salvador's announcement, the IMF warned in late July of the dangers inherent in countries adopting cryptocurrencies as legal tender. The US-based multilateral lender said that widespread use of the volatile tokens could undermine "macroeconomic stability" and potentially expose financial systems to widespread illicit activity.

The UK's Financial Conduct Authority has warned that "if consumers invest in these types of products, they should be prepared to lose all their money". The Basel committee of global banking regulators said in June that "the growth of crypto assets and related services has the potential to raise financial stability concerns and increase risks faced by banks" — including fraud, hacking and terrorist financing.

Consumer protection, particularly from scams large and small, is a huge concern in crypto markets. Unfortunately, the most vulnerable in poorer countries often pay the price.
"There's a lot of hype around [crypto], so I think people may be more willing to invest where they're more desperate," says Grauer.

Many national regulators have found themselves ill-equipped to deal with digital asset companies that claim not to be domiciled anywhere.

In countries such as Zimbabwe, regulators have come down hard on crypto ventures, only to reverse their positions. Zimbabwe's central bank has said it is drafting a policy framework for regulating cryptocurrencies, after banning local banks from transacting with them in 2018. In Nigeria, the central bank banned commercial banks from dealing with companies involved in cryptocurrency transactions — which quickly found a workaround using third-party accounts.

Some observers, including the Central Bank of Nigeria, have expressed concerns that inexperienced investors could lose their meagre savings gambling on a highly speculative asset. "Small retail and unsophisticated investors also face high probability of loss due to the high volatility of the investments in recent times," the bank said, as it sought to clamp down on the trade.

But while most crypto services say they are keen to comply with regulators, they believe excessive bureaucracy will drive people to seek out their services. "If a central bank decides to impose some direct form of restrictions on their people, you will see a flood of those people coming to [crypto platforms] looking for help," says Youssef. "They all move with the flux of the geopolitical world, and we have to be ready for that."

In El Salvador, the government has decided that rather than clamping down on crypto, it should embrace it. For Domjan, whether the project succeeds or fails, it has changed the game.

"El Salvador is a genuine country," he says. "It's not under sanctions, it's a member of the IMF, it is inserted in the international financial system. The point is, it confers an element of legitimacy. We will learn lessons about how a country could implement an internationally tradable digital currency as a means of settlement."

Written by: Jonathan Wheatley and Adrienne Klasa
© Financial Times

 
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wizards rage

1st Grade Fringe
Apr 18, 2016
4,553
Tauranga
El Salvador becomes the fist country in the world to mainstream the use of Bitcoin as legal tender - and it lost 10% value in the day. How can you operate a business and set a price when hours later your losing money at that price 🤣

While I am doubtful over the future of crypto, I really do hope the innovative countries can make it work for them.

 

Navigator

Christchurch Born n bred white bait fed.
Contributor
May 19, 2012
2,290
Brisbane Queensland Australia
El Salvador becomes the fist country in the world to mainstream the use of Bitcoin as legal tender - and it lost 10% value in the day. How can you operate a business and set a price when hours later your losing money at that price 🤣

While I am doubtful over the future of crypto, I really do hope the innovative countries can make it work for them.

Same old crypto world.
buy The rumor sell the news shit, whales dumping then buying back at a cheaper price
 

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