How is Cryptocurrency Handled in Divorce?
What is Cryptocurrency?
A cryptocurrency is a digital, encrypted, and decentralized medium of exchange. Unlike the U.S. Dollar or the Euro, there is no central authority that manages and maintains the value of a cryptocurrency. Instead, these tasks are distributed among cryptocurrency’s users via a blockchain. You may be familiar with the most popular versions, Bitcoin and Ethereum, but there are more than 9,000 different cryptocurrencies in circulation.
As crypto has become increasingly more popular and accepted, people are now using crypto to buy regular goods and services, while others invest in cryptocurrencies, like they would in stocks.
How is Cryptocurrency Handled in Divorce?
Cryptocurrency is an asset that is subject to division, just like any other asset in a divorce.
Is My Spouse Hiding Cryptocurrency During our Divorce?
Cryptocurrency has now become a valuable asset. However, unlike traditional assets, crypto poses unique challenges because it is not stored in traditional bank accounts. This means a spouse can easily hide these assets.
Cryptocurrency can be held in four different places:
- An exchange (like Coinbase)
- Software wallet (an App like Metamask)
- Hardware wallet (like a USB drive)
- Paper wallet (paper notes detailing addresses used to hold and trade cryptocurrency)
If you suspect your spouse may have and/or be hiding cryptocurrency, there are several places you can look to determine whether cryptocurrency is in fact stored. Those places include:
- Bank statements, which could reflect purchases or withdrawals on exchanges
- Tax returns (reporting gains or losses on the sale of cryptocurrency)
- Loan applications (listing cryptocurrency as an asset on a financial statement)
- Hardware or paper wallets stored within the marital home, especially in desks or safes. Notes with miscellaneous phrases or numbers may be indicative of the existence of a paper wallet.
Divorce Lawyers Serving Greenwich, Fairfield, CT & the Surrounding Areas
The legal framework for handling cryptocurrencies in divorce is still evolving. It is crucial to work with professionals well versed in in the complexities of these digital assets. The lawyers at Ferro, Battey & Eucalitto, LLC, are knowledgeable in digital currencies and will help you navigate your divorce in this new digital age. For more information, contact us today.
