It’s likely that you now have friends, family, or coworkers who invest in cryptocurrencies if you don’t yourself. In a very short period of time, the market for cryptocurrencies has grown from a very small niche to almost completely mainstream. With cryptocurrencies becoming so commonplace, a new issue has arisen regarding how they are handled during divorce proceedings.
The main issues to be settled during most divorce proceedings are identifying and dividing financial assets as well as determining alimony payments. The disclosure of financial assets can be handled by a lawyer using a variety of tools, but when Bitcoin and divorce are involved, a whole new set of options emerges.
Divorce and Bitcoin are handled very differently from divorce and other financial assets for a number of very important reasons. One is their value’s extreme volatility. It’s not uncommon for the value of bitcoin and other cryptocurrencies to experience absolutely irrational swings in both directions. Value must therefore be monitored and updated continuously, or it must be set in advance so that it doesn’t change in value over time. It’s a less than ideal situation in either case for dividing assets and establishing alimony.
Cryptocurrency markets and their transactions were created to be both anonymous and secure, which is another important concept to comprehend when relating it to divorce. There are differences between looking into a bank account, retirement account, or stock portfolio and looking up the holdings, accounts, or transactions of an individual. Whether or not the courts will grant any subpoena power in support of the traceability of a person’s crypto accounts will be uncertain at this time.
Given that the value of all cryptocurrencies is still rising, it is obvious that this is just the beginning of the Bitcoin and divorce issue. How they are handled as financial assets during divorce proceedings will remain in the spotlight as more people start to use them or continue to do so, and as they become more common and accepted. Many people today are unsure of how to treat them in such matters because of their initial rapid rise, which caught many people off guard. Remember that Bitcoin only came into existence a little over ten years ago.
As always, make sure to seek advice from a knowledgeable expert in your neighborhood. A knowledgeable divorce lawyer can help you through the process and provide insight into the areas of financial discovery and all facets of a pending case, even though there is still a lot of uncertainty regarding how Bitcoin and divorce will be treated and what types of rulings may be in store for us in the future.