The Evolution of a Hyper-Contested Crypto in Divorce Case

Forming The Dream Team

Rexxfield was contacted by lawyer we had worked with before – Marcus Stein of Marcus Stein Law. Marcus briefed us on the case, discussed deliverables and process, and we made an offer of engagement to his client. His client accepted and together with Cinnamin O’Shell, of O’Shell Daun forensic accountants, we formed a dream team to pursue justice for the client.

Blockchain Tracing Begins

Our blockchain investigator began reviewing the initial discovery documents and mapping the revealed accounts and transactions in a blockchain trace using Chainalysis Reactor. This trace revealed where the husband had sent crypto from one or more of his exchange accounts

‘Peeling the Onion’: Request | Trace | Repeat

We identified deposit addresses that had not been revealed in the initial discovery. A mult-month iterative process unfolded of asking for documents of deposit addresses, tracing, and requests for more documents.
We needed to know:

• Where was the husband sending crypto?
• Did he send to himself or to third parties?
• For what purpose, and where was it now?

We were determined to find if the husband was hiding crypto, irrespective of his lawyer’s evasion tactics.

Our traces went all the way back to 2017.

Handling Objections

Throughout the process, we encountered many technical objections from the husband’s lawyers. We had to carefully define the crypto terms we were using, such as hardware wallet, software wallet, deposit address, public key and so forth. By refining our discovery language, we eventually secured enough asset information that we were able to find important information he had denied or left out from the discovery documents.

Slam Dunk! We found 52 ‘Missing’ Bitcoin

Eventually we got to a point where we needed to ask the husband questions under oath, (avoided in the discoveries). Our Rexxfield team carefully crafted the questions, and Marcus Stein went through them (against constant objections from the opposing lawyer) during the deposition. During the questioning, the husband could not account for the transactions that we had discovered, or the digital services that we found that he had sent crypto to. Crucially, he had denied that he had owned a hardware wallet (such as a Ledger), but now had to admit its existence. He also admitted to having owned 52 BTC (now worth $3.5m), that he claimed he no longer had. This was crucial. Now we had testimony not only of significant unaccounted for digital assets, but also that the husband had left out information in the discovery process.

Trial or Settlement: Ready to Testify

After further discoveries, we inched closer towards a trial. Our crypto specialist met with Ms O’Shell and Mr Stein to prepare for the trial. We had our sworn affidavit and our blockchain evidence prepared. We were ready to rip into the husband to demonstrate to the court that he had millions in undeclared matrimonial assets, and that he and his lawyer had obstructed the discovery process in what had been declared.

On the very day of the trial, the other side requested a settlement. Ms O’Shell and Mr Stein negotiated a settlement that the wife was happy with.

Case Resolution: Happy Wife

We never did get to the bottom of all the crypto the husband may or may not have had, but with this case already taking about 7 months, the marginal value we believed would come from continuing to pursue to the last coin, and the need for the wife to finally put the emotional distress behind her and move on; the settlement was the best outcome for the wife to achieve a fair settlement. Ms O’Shell, Mr Stein and the Rexxfield team delivered significant value to the aggrieved wife and walked along side her without wavering until she received justice.