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How cryptocurrencies add complexity to the divorce process

If you don’t personally invest in cryptocurrencies, chances are you have friends, family, or colleagues who do by now. Cryptocurrencies have gone from being a niche market to becoming almost mainstream, and they have done so in a very short time. Now that they are so ubiquitous, there is a new question to grapple with, and that is how cryptocurrencies are handled in the divorce process.

The determination and distribution of financial assets, as well as the determination of alimony payments, are central issues to resolve during most divorce proceedings. There are many tools at a financial asset disclosure attorney’s disposal, however, when you combine Bitcoin and divorce, you are left with something entirely new.

Handling Bitcoin and divorce is different from handling other financial assets for several important reasons. One is the sheer volatility of its value. Bitcoin and other cryptocurrencies are known to experience absolutely wild swings, both up and down, in value. Therefore, the value must continue to be tracked and updated on the fly, or set at a particular point in time, when it could end up being worth something very different in the future. In any case, it is a less than ideal circumstance for determining and distributing assets or establishing alimony.

Another key issue to understand between cryptocurrencies and divorce is that these markets and their transactions were designed to be anonymous and secure. Searching for an individual’s holdings, accounts, or transactions is not the same as searching a bank account, retirement account, or stock portfolio. Traceability of an individual’s crypto accounts will be difficult at best, and whether or not the courts grant any subpoena power behind that is unclear at this time.

Clearly, this is just the beginning of the Bitcoin and divorce issue, because all cryptocurrencies are still on the rise. As more people start or continue to use them, and they become more common and accepted, how they are handled as financial assets during divorce proceedings will continue to be in the spotlight. It is the fact that they rose so quickly in the beginning that has left many people off guard today about how to deal with them in such matters. Keep in mind that Bitcoin was launched less than a decade ago.

As always, be sure to consult with an experienced professional in your local area. While there is still a lot of uncertainty about how Bitcoin and divorce will be treated, and what kinds of rulings we can expect in the future, an experienced divorce attorney will be able to guide you through the process and offer you insight into the areas of financial discovery and all. aspects of a pending case.

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