A Guide to Cryptocurrency and Divorce
Approximately 50 percent of marriages will end in divorce. In most divorce proceedings, both parties recognize that splitting the assets is a critical case component. What many people don’t realize is how complex this situation can get.
Since bitcoin is gaining popularity, people often wonder, “Is Bitcoin an asset in divorce?” The issue is that most lawyers are unfamiliar with cryptocurrencies, including how to manage them, value them, and split them.
If you are stuck in a confusing situation about cryptocurrencies and divorce, continue reading to learn more.
Crypto Assets Divorce Is Bitcoin an Asset in Divorce?
Once the divorce party has gathered all relevant information about their cryptocurrency situation, they can divide it as an asset. Due to the volatility of cryptocurrency, the most straightforward approach is to split the assets evenly.
Divorce and Crypto: Why Is It So Complicated?
Crypto is a challenging case in divorce because the numbers on the blockchain cannot be linked back to the owner of the currency without access to the private key. The private key is the owner’s password to spend or exchange the cryptocurrency unit on the blockchain. As a result, to determine whether or not someone has bitcoin, they must have access to the private key.
Private keys are stored in a virtual “wallet,” but many bitcoin users store their private keys on a third-party service called an exchange. However, a spouse determined to conceal bitcoin may move the private keys from exchanges to an untraceable wallet. But once the private keys are discovered, it is easy to trace all transactions since the blockchain records every detail.
Hiding Bitcoin Divorcees Are Using Cryptocurrency To Hide Money
Most lawyers can locate assets that a party wants to conceal. Once a court knows that a party is being dishonest regarding asset disclosure, it can be used against them in the case. In addition, the lawyer and spouse can examine bank and financial records for proof of cryptocurrency ownership.
There is often evidence of crypto transactions on a person’s technological devices. For example, smartphones, tablets, and laptops are often used to conduct bitcoin transactions. As a result, a forensic specialist can often extract information about bitcoin transactions straight from personal devices.
Can crypto be split in a divorce? The answer is yes, but the volatility makes crypto one of the most challenging divorce assets to split. For example, crypto worth $200,000 may decrease to $100,000 or increase to $400,000 throughout the divorce procedure.
Couples should prepare for this situation with a volatility formula in the divorce contract. For instance, if the value increases by “X” percent, the way they divide other assets may alter proportionately.
How To Deal With Bitcoin as an Asset in Divorce?
Is Bitcoin an asset in divorce? The answer is yes, and it’s a tricky asset to divide and discuss. It may be a rare asset in the past, but it has become a common asset with the advancement of technology.
If you are still wondering, “Is Bitcoin marital property?” Contact the divorce lawyers at Dalena & Bosch today.
Our team of expert divorce lawyers is here to answer any of your questions regarding divorce.