Division of Property: Dealing with Cryptocurrency in Divorce

The court has determined that cryptocurrency is “money” or “property” making it subject to valuation and division.  However, with the rise of cryptocurrency, it has become harder to discover hidden assets because digital assets are traded on a decentralized network. Failure to fully and accurately disclose cryptocurrency has been determined to be a breach of fiduciary duty and may result in the court awarding all or most of the value of the asset to the other party.

Therefore, it is important to develop a discovery plan when dealing with cryptocurrency. You should work with your attorney to review various financial statements including tax returns and bank statements along with digital data including computer hard drives and digital wallets.  You may need to subpoena records from the cryptocurrency exchange and hire an expert to analyze the data. However, you should meet with your attorney before you take any steps and weigh the cost benefit analysis of pursuing lengthy and expensive discovery endeavors. In the end, you do not want to spend thousands of dollars on an asset that costs pennies.

Cryptocurrency is here to stay and has presented an updated way to hide assets. Your family law attorney should assist you with discovering these assets so they can be characterized, valued and divided as part of your community estate.