← The Digital Executive
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- [00:00]
A
Foreign. Welcome to Coruscant Technologies, home of the Digital Executive podcast. Do you work in emerging tech? Working on something innovative? Maybe an entrepreneur? Apply to be a guest at www.corazon.com brand welcome to the Digital Executive. Today's guest is Hossein Barengi. Hossein Barinji, owner of Berenji Divorce and Family Law Group, is a seasoned divorce lawyer with a practice focused on complex high net worth divorces. With expertise in digital assets and cryptocurrency in divorce settlements. His commitment to providing aggressive, high quality representation has led to consistent multimillion dollar property settlements and countless favorable alimony and child support judgments throughout Los Angeles. Whether it's fiercely litigating a case through a trial when the opposition is unreasonable, or obtaining the best settlement for a client who want to avoid a lengthy, painful court battle, he is known for using his vast courtroom and negotiation experience to attain optimal resolutions tailored to meet the need of each client. Well, good afternoon Hussein. Welcome to the show.
- [01:13]
B
Good afternoon. Thank you for having me.
- [01:15]
A
Absolutely my friend. I appreciate it and making the time you're in Los Angeles. I'm in Kansas City, used to live out in the Orange county area. So I totally get it. Love that part of California. Nice and sunny except the traffic. But either way, just glad to have you. Hussain, jumping into your first question, you specialize in complex high net worth divorces. Why is hidden cryptocurrency increasingly becoming common in high net worth divorces?
- [01:43]
B
Well, there are a few reasons. I mean, first of all, I think that the nature of the investment, the volatility in a price, it's a pretty pricey gamble for people to invest in cryptocurrency. And I think it lends itself to investments by people who have a lot of disposable income. So the nature of the investment I think lends itself to people who are wealthy and can't afford that risk. And second, wall, when you think about what the idea of cryptocurrency is, is to allow people the ability to move money around without dealing with the restrictions between different countries, the restrictions, banking restrictions that institutions have. This allows people to move around money. And typically the people who have the ability or will need to move around money like that are we individuals. And finally, I believe that it does allow some diversification. It is something new. It is something that is, is some, you know, it's not the traditional stock and bonds that are safe. So people are really hesitant to get into it. And if the wealthy people are the ones in the cutting edge because they have that disposable income and they couldn't invest in something that's new without really thinking much of it. So I think those three reasons lend themselves to being a investment that that is really kind of in line with wealthy individuals desires.
- [03:11]
A
Thank you, I appreciate that. And yes, as you've seen over the last few years, cryptocurrency is, can be a great investment. There's obviously a lot of risk and volatility with some of that. But as there's not very many restrictions and you can typically move this stuff around the chain and through different countries, it's not really a big deal there. But I can understand why high net worth individuals are certainly taking this avenue for investment. And Hussein, divorce law continues to evolve around issues like digital assets, cryptocurrency and business valuation. What emerging legal tech trends are you watching most closely right now?
- [03:47]
B
Well, I mean the laws always kind of step behind technology. For example, we've had cryptocurrency for many years now, but only recently there's a digital financial asset law that was passed in California which closes a lot of loopholes on cryptocurrency and it codifies its treatment like other financial instruments under the law, such as for to be able to conduct discovery, figuring out who has what, where the cryptocurrency located. Ramifications if you don't disclose that. I mean these things have just been codified in the digital financial asset law. But look how many years we've had cryptocurrency. So there is always a delay. So I'm always looking for trends in the next innovation in digital currency and the way it's stored and treated and the way it's traded as well. Because there, there's many developments that happen. I mean from day one when cryptocurrency kind of was developed. Now we're in a whole new ball game in a new world. And I think that over time there'll be additional developments on how cryptocurrency is stored and transferred and traded. And I'm always looking for those trends.
- [04:53]
A
Thank you, really appreciate that. And I, I appreciate you staying at on top of this, ahead of this is, and you mentioned this, the laws traditionally about a step behind emerging technologies. I'm glad that California has come out with a financial and digital assets law recently. But the way you explain for audience how you're looking ahead, looking at how it's stored, invested, traded, that sort of thing is really important for us here. Listening but also for your clients. Hussein, how do spouses use cold wallets, privacy Coins and blockchain to conceal wealth and how forensic accountants trace them.
- [05:28]
B
Well, I'm sure your audience is pretty well versed in these items. But just to just kind of recap cryptocurrency and wallets, I mean these are instruments that hold the, the code, the key to the cryptocurrency. You have institutions like centralized crypto exchanges or decentralized crypto exchanges. You have public or private coins and you have blockchains. Any investigation that we do relates to all of these different parts of the cryptocurrency. Whether it's the amount, whether where the key is located, whether it's the through the blockchain and look at the transactions, looking at whether it's a private coin or a public coin and looking at the exchanges. So every the way that cryptocurrency is held is really dictates what we really need to do. So for example, if the, the currency is in a centralized crypto exchange, that makes our job a lot easier. We can just subpoena an institution such as Coinbase and it's kind of like an exchange, just like Mel Rynch or Morgan Stan for stocks. And we're able to get a lot of information fairly easily. Obviously it's a lot harder when you're talking about decentralized crypto exchanges. That creates more problem. Same thing when you're dealing with whether you're talking about a hot wallet or a cold wallet. Well, hot wallets are online based, they're, they're easier to potentially access. We can, but cold wallets are very difficult because nearly we're now looking at a physical, a location, maybe a vault, maybe a USB drive that we don't have access to that has that information. So the nature of where these assets and how they're kept are really important. And it really determines what type of plan we need to implement to be able to find this information. Typically we, there are different ways to get the information from the other side. So for example, we send regular discovery, meaning that we ask the other person to identify their cryptocurrency. And when they do identify their cryptocurrency, it's usually in an exchange. And we can subpoena the exchange and we can get the information that we need. Now what happens when they're not truthful? And that's kind of where the concern is. So then we need to, we look at the income, we look at the assets. The money has to have gone somewhere. If it was not stem spent, it's saved. And if it is saved, then where is it saved. And if we don't have the information of where it's saved, then we stick deeper. And this is where getting help from my own clients are really important because they're always hearing things. They're, they're, they have suspicions there might be, they might overhear their spouse talking on the phone with a friend. And we get clues, we had certain clues in the case of where some of these assets are. And this is where we need to go into their, let's say their electronic devices and get orders to be able to get copies of their hard drives, look at bank statements to see if money's been moved around, where's the money moved around and then from there where we kind of go, go to next, the next step. Okay, now that we have certain indications that money's been hidden, we try to get access to their electronic equipment. Once we have access to that, then we have a forensic in the forensics go through their electronic equipment and find traces of trades, traces of investments. And then from there we ultimately we are trying to look at the flow of money in and out of their accounts, determine where the money's gone. And once we find that kind of beginning point, then we can follow that trail down the rabbit hole and try to get to the exchange and get to the assets. So it's a lot of variety of different tools that we use. Some are voluntary, some are investigative, some are through forensic accountants, some are forensic computer scientists who go through the, through the computers to figure this information out. And overall there are a lot of different steps. And the more an individual's trying to hide it, obviously it's more difficult and there are more processes in place and more time that it takes to be able to unveil what's being hidden. In family law, the good thing is that time doesn't really hurt you because if an asset is disposed of, you can always go back and try to get that particular reimbursement on another asset. And usually when we're dealing with high net worth individuals, sure, they might have a million dollars in cryptocurrency or even more, but they're going to have other assets. And therefore if they are, they're, they're being underhanded, they're lying and they're cheating and they're hiding assets. Once we find that out, even if it's been, let's say, transferred, if it's been transferred to overseas, if it's been liquidated, we're able to offset those type of hidden assets from other assets. So we usually are able to Protect our clients. And it does take time and sometimes by the time we are able to find the, the asset is liquidated, but we're still able to protect our clients on the back end from an offset on the other assets.
- [10:50]
A
Thank you, really appreciate that. Just unpacking some of what you said here. The crypto and digital assets terminology that you shared with our audience is certainly helpful, especially as it relates to what you do. But knowing how crypto is held, stored, whether it's stored in an exchange or in a cold wallet, which obviously is harder to obviously get a hold of. But in your profession in law, helping us understand how you perform that discovery issue, subpoenas, etc was very helpful. And he went even deeper into some of that discovery. Obviously there's a financial paper trail as we used to call it. There's ways you can see where there's credits, debits and you can see where maybe some assets were transferred maybe into digital assets. So I really appreciate that. And Hussein, looking ahead, last question here. Do you believe, what do you believe is the future of divorce and family law, especially as technology, wealth distribution and societal expectations continue to change with respect to technology.
- [11:47]
B
I mean, technology can be a real benefit to society as a whole. It could also be very beneficial to individuals because it enables them to engage in immediate financial transactions and a multitude of financial instruments, including cryptocurrency. So people are able to create wealth much faster if they're savvy enough and follow the market. Or they could use their cryptocurrency to invest, I mean, and move money around much faster. So you do have a benefit and an upside with the technology. But the downside, it also creates a lot of hardship on us as family attorneys to discover some of these assets. So I think as technology changes and society become more web based, especially in an era of AI, we will see more web based development that that has significant value which will be harder to trade. So people will use the web based, the technology to create wealth. It would cause more litigation, it would cause more cost and it would cost us a lot more to be able to find that information. So as technology increases, our job gets harder. And I think that that's kind of a relationship that that is undeniable. It's gone a lot harder. It was much easier to subpoena a bank and find assets or financial institutions. It was much easier to find the information out. But now it's getting harder and I think it's going to continue getting harder and we have to become more innovative and use more experts to Try to untangle the web of financial deceit that happens through cryptocurrency. With respect to, I think you mentioned wealth disparity. I mean, I think that what's going on with the distribution of wealth, I think wealth disparity is an important topic that we do have to talk about. I think that the middle class is shrinking. I think they're. The wealth gap is increasing. And I think as the wealth gap increases and you have the middle class shrinking, you're going to have the, the nature of family law, the nature of divorce changes as well. There will be more consolidation of firms, I believe, and I think it's happening. I think that a lot of firms are consolidating the number of complex cases needing high power attorneys diminish. And I believe that as the nature of people's assets change, so will the nature of the attorneys. The social expectations I think you're talking about, I mean, I get that. My, my, what I go to when I hear that is people's relationship socially, meaning are they getting married, are they not getting married? There's definitely less marriage that's happening right now. And people, a lot of people are getting married are having prenups. So that in itself changes the practice, family law. I'm not sure if that's what you meant. You know, if we have less marriages and we have prenups that have less, less fighting at the back end, we're going to have less divorces and less, less need for high powered attorneys dealing with a lot of these things in the future, if that's what you meant. If not, I can.
- [14:56]
A
No, it's perfect. I appreciate that, I really do. And just kind of going backwards, there is going to be a lot of societal change. We're seeing it today, less marriages, a lot of prenups, as you said, and hopefully that makes life a little bit easier for everybody. But just to go into tech a little bit. You talked about tech being a great benefit for society as a whole, which we talk about tech here on the podcast quite a bit. People are able to create wealth much faster, transfer wealth faster, that sort of thing. But alternatively, it can be hard for lawyers like you to find and discover these financial and digital assets, which I agree. And hopefully we can start to make that even more transparent because typically digital assets on the blockchain are very open, very transparent, and everything can be tracked there. It's just a matter of how did the money get transferred into that particular chain. So I appreciate that. And Hussein, it was certainly a pleasure having you on today. And I look forward to speaking with you real soon.
- [15:51]
B
It was a pleasure to be on the show. Thank you so much.
- [15:55]
A
Bye for now.