The Growing Issue of Cryptocurrency During a Divorce
Cryptocurrency is no longer an obscure investment opportunity. It has turned into a significant investment segment for many people across the country. Several investors have become wealthy as the price of Bitcoin, Ethereum, and other crypto-assets increased dramatically. Correlating with this, where there is wealth, there are always complications in matters related to divorce. Division of cryptocurrency has become a major contentious point between many divorcing couples.
Cryptocurrency and the Law
The law looks at cryptocurrency as any other asset. It is treated similarly to real estate, antiques and any other item you may own. Furthermore, whether it is to be considered as separate or marital asset depends on when the crypto was acquired. Another factor considered in the division of cryptocurrency is whether it grew during the marriage or not. You can expect your crypto assets to be divided in a fair manner as other assets during a divorce.
Division of Crypto Assets During a Divorce
It is complex to divvy up cryptocurrency. For starters, the volatility of the crypto market doesn’t make matters easy. The price of different currencies can soar or crash from day to day. This makes it difficult to arrive at a fair monetary value. The amount of assets that you may agree to during divorce negotiations may be different from the amount you get when the divorce is actually finalized.
In addition, you need to decide how the crypto assets have to split. Both parties may prefer keeping their share in its existing form if they are both active in crypto trading. They may agree to simply divide the crypto wallet. This is beneficial since it removes the issue of obtaining a fair monetary value for the coins.
However, if crypto-assets hold interest for only one party, the other may wish to obtain their share in standard currency. A family law attorney experienced in matters of cryptocurrency will be able to help you determine what your share may be worth during the divorce.
Using Crypto to Hide Marital Assets
Cryptocurrency can be used by spouses to hide assets when they are contemplating a divorce. If you are not aware of crypto trading, you may not know whether your spouse has purchased any crypto shares or owns a secret crypto wallet. Fortunately, people that deal in crypto assets are seldom quiet about it. You can alert your attorney if you know that your spouse dabbles in crypto assets.
Generally, attorneys wait for the party to disclose all their assets and debts. If not, they will use investigators to dig deeper. Forensic accountants can also help uncover hidden assets, such as cryptocurrency. Stemming from this, you should know that most people getting divorced don’t usually try to hide assets. This may not be relevant to you. People know that hiding assets put them at an increased risk of fraud or losing even more upon discovery.
Cryptocurrency has the potential to make a divorce highly complicated. However, the right divorce attorney can help you feel more confident in the procedure and know that the assets are being equitably and fairly divided.
Discovering Hidden Crypto Assets in a Divorce
Both parties to a divorce are mandated by the law to present an honest and true accounting of their marital debts and assets. The other party’s lawyer can seek a court order for revealing any accounts or computer records if one spouse is suspected of hiding crypto assets. You may be able to get records of cryptocurrency wallets held with providers.
It is true that family court judges don’t allow fishing expeditions. Hence, you would need to bring some type of proof or evidence to corroborate your reasonable suspicion for obtaining a subpoena.
Cryptocurrency assets can be discovered in multiple ways. The best-known crypto assets, in most cases, are easy to discover. This includes Bitcoin and Ethereum. There may be a higher level of anonymity in other cryptocurrencies. With that said, these assets are generally more volatile and less valuable as compared to more expensive and better-known digital currencies.
Your attorney may bring in a forensic expert to search for crypto tickers, keys for digital wallets, and login credentials for exchanges. Credit card statements, bank statements, and other financial documents may indicate whether there are any crypto purchases or sales made. In addition, your spouse may have documented their crypto income in previous tax returns or loan applications among other documents.
Generally, US-based accounts are easier to track since exchanges can be directly subpoenaed. Cryptocurrencies in the global marketplace and other foreign exchanges may not be as forthcoming with information requests made by a family court.
Talk to Our Skilled Kentucky Divorce Attorneys Today
An experienced family law attorney can be helpful if you are concerned about how crypto assets held by you and your spouse will be dealt with during the divorce and asset division process. The knowledgeable lawyers at John H. Ruby & Associates can provide accurate legal advice and support. Schedule a consultation with a divorce attorney today. Give us a call at (502) 895-2626 or use our online contact form to schedule an appointment.