How cryptocurrencies complicate the divorce process

If you don’t personally invest in cryptocurrency, chances are you have friends, family members, or colleagues who do at this point. Cryptocurrencies have gone from being a very niche market to being almost completely mainstream, and they’ve done it in a very short amount of time. Now that they are so ubiquitous, there is a new issue to contend with, and that is how cryptocurrencies are handled in divorce proceedings.

The determination and distribution of financial assets, as well as the determination of alimony payments, are major issues that are resolved during most divorce proceedings. A lawyer has many tools at his disposal for disclosing financial assets, but when you combine Bitcoin and divorce, you’re left with something entirely new.

Bitcoin handling and divorce is different from handling other financial assets for several huge reasons. One of them is the sheer volatility of their value. Bitcoin and other cryptocurrencies are known to fluctuate wildly, both up and down, in value. Therefore, value either needs to be continuously tracked and updated on the fly, or set at a specific time when it may end up being worth something much different. In any event, this is a less than ideal circumstance for determining and dividing assets or establishing alimony.

Another key issue to understand between cryptocurrency and divorce is that these markets and their transactions have been designed to be both anonymous and secure. Searching an individual’s holdings, accounts, or transactions is not the same as searching a bank account, retirement account, or stock portfolio. Tracking individual crypto accounts will be difficult at best, and it remains unclear at this point whether the courts will exercise any subpoena powers over it.

Obviously, this is only the beginning of the Bitcoin and divorce problem, because all cryptocurrencies are still growing. As more people start or continue to use them and they become more common and acceptable, how they are handled as financial assets during the divorce process will continue to be a focus. It is the fact that they rose so quickly from the beginning that has made many people today suddenly know how to treat them in such matters. Mind you, Bitcoin was launched less than a decade ago.

As always, be sure to consult with an experienced professional in your area. While there is still much uncertainty about how Bitcoin and divorce will be handled, and what types of decisions may await us in the future, an experienced divorce attorney will be able to guide you through the process and offer insight into the areas of financial discovery and all aspects of the issue at hand. affairs.