If you don’t personally invest in cryptocurrencies, chances are that your friends, family members, or colleagues are at this point. Cryptocurrencies have gone from a very niche market to almost completely mainstream, and they’ve done it in a very short time. Now that they are so ubiquitous, there is a new question to discuss, and that is how cryptocurrencies are handled in the divorce process.
Determining and dividing financial assets, as well as determining alimony payments, are major issues to be resolved in most divorce proceedings. There are many tools available to a lawyer for financial asset disclosure, but when you combine Bitcoin and divorce, you’re left with something entirely new.
Handling Bitcoin and divorce is different than handling other financial assets for several big reasons. One is the high volatility of their value. Bitcoin and other cryptocurrencies have been known to experience absolutely wild swings, both up and down. Therefore, the value must be continuously tracked and updated, or it must be set at a certain point in time, where it may be worth something very different. In either case, the situation is perfect for determining and dividing assets or establishing alimony.
Another key issue to understand between cryptocurrency and divorce is that these markets and their transactions were designed to be anonymous and secure. Searching a person’s assets, accounts or transactions is not the same as viewing a bank account, retirement account or stock portfolio. Tracing an individual’s crypto accounts will be difficult at best, and whether the courts have put any subpoena power behind it is unclear at this point.
Clearly, this is only the beginning of the Bitcoin and divorce problem, as all cryptocurrencies are still on the rise. As more people start using them or continue to use them, and as they become more common and accepted, how they are handled as financial assets in divorce proceedings will continue to be in focus. The fact that it rose so quickly to begin with has left many people at a loss as to how to deal with such matters today. Remember, Bitcoin was launched less than a decade ago.
As always, be sure to consult with an experienced professional in your area. While there is considerable uncertainty about how Bitcoin and divorce will be treated and what types of rulings we can expect in the future, an experienced divorce attorney can guide you through the process and provide insight into the areas of financial discovery and discovery. all aspects of a pending case.