If you are not personally investing in cryptocurrency, it is likely that at this point you will have friends, family members or colleagues doing it. Cryptocurrencies have moved from a very niche market to almost complete integration, and they have done so in a very short time. Now that they are so ubiquitous, there is a new question to be resolved, and that is the question of how cryptocurrencies are treated in the divorce process.
The determination and allocation of financial assets, as well as the determination of alimony, are central issues to be resolved in the majority of divorce proceedings. There are many tools available to a lawyer for the disclosure of financial assets, but when you combine Bitcoin and divorce, you end up with something completely new.
Managing Bitcoin and divorce is different from managing other financial assets for several huge reasons. One is the pure volatility of their value. Bitcoin and other cryptocurrencies are known to undergo absolutely wild fluctuations, both up and down, in value. Therefore, the value should 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 down the line. In either case, this is a less than ideal circumstance for determining and distributing assets or fixing 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 for an individual's assets, accounts or transactions is not the same as looking in a bank account, a retirement account or a stock portfolio. Traceability of an individual's cryptographic accounts will be difficult at best, and whether or not the courts grant a power of summons which is unclear at the moment.
Obviously, this is just the beginning of the Bitcoin and divorce issue, as all cryptocurrencies are still on the rise. As more and more people start using them or continue to use them, and they become more common and accepted, the way they are treated as financial assets during divorce proceedings will remain in the spotlight. It was the fact that they increased so rapidly at the start that left many people off guard today on 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 an experienced professional in your area. Although there is still a lot of uncertainty as to how Bitcoin and divorce will be handled, and what types of decisions might await us in the future, an experienced divorce lawyer will be able to guide you through the process and give you an overview of the areas of financial discovery and all aspects of a pending case.