A quickly emerging topic in the divorce world is how divorcing couples deal with cryptocurrency in equitable distribution. When dividing their marital estate, divorcing couples must value assets like cars, houses, businesses, and other personal property. Given the rise in popularity and sheer value of some cryptocurrencies, these digital assets should be examined and considered like any other more “traditional” asset in equitable distribution. Cryptocurrency provides unique challenges to divorcing parties, lawyers, and courts with respect to locating, valuing, and ultimately dividing cryptocurrency when couples split.
Cryptocurrency, in a very broad sense, is a digital form of currency that is not held in or insured by any physical bank. Some better known examples of cryptocurrency include Bitcoin and Ethereum. Cryptocurrency is a relatively new form of currency that is not widely understood, hardly regulated by the government, and does not exist in physical form.
One challenge cryptocurrency poses in divorce is that it may be hard for one spouse to even know that the other spouse owns cryptocurrency, let alone know where their spouse is holding the cryptocurrency in its digital form, or what their spouse’s cryptocurrency is worth. There are ways to track cryptocurrency transactions, but the more traditional ways of monitoring financial transactions like bank statements, ledgers, or bank account numbers will be of little use.
Another difficulty cryptocurrency poses in equitable distribution is determining the value of these digital assets. Cryptocurrencies are notoriously volatile and can gain and lose value rapidly on any given day. Like certain stocks, this makes it even more important that divorcing parties know at what point in time assets like cryptocurrency will be valued for equitable distribution purposes.
Cryptocurrency is a new, cutting edge form of digital commerce and requires attention and skill to handle in a divorce/equitable distribution situation.
If you have questions about your divorce involving cryptocurrency or other digital assets, call Brian directly at 610-840-0221 or via email at [email protected].
