In our last post, we highlighted the increasing popularity and value of bitcoins, a form of cryptocurrency being used by millions of consumers and merchants across the world. While bitcoin is not currently poised to overtake the U.S. dollar, British pound or euro anytime soon, it is widely accepted across online retailers. Bitcoin can be used to reserve rooms on Airbnb and Expedia, purchase furniture on Overstock, and buy video games on Ebay.
The anonymity, invisible nature and volatility of bitcoin and other forms of cryptocurrency can be difficult to manage in a divorce. There is little precedent detailing the accounting and division of such assets, mainly because most people don’t understand how bitcoin works, where it can be located and what value is actually accurate. It may be difficult to enforce court orders (such as an injunction) applied to bitcoin.
A story about a divorcing couple in the United Kingdom quarreling over a crypto stash valued at $830,000 exemplifies this conundrum.
Given the distrust between the parties, it is difficult to determine exactly how much bitcoin was in a party’s virtual wallet, and what the value of it was at the date of valuation (the date where the parties separated for purposes of divorce). The volatility of bitcoin can also make settlement discussions difficult if the value suddenly skyrockets as it did in December 2017.
With bitcoin becoming a mainstream currency, more divorce attorneys are asking the right questions in the discovery process to protect their clients’ interests. If you suspect that your soon-to-be ex-spouse is hiding assets, an experienced family law attorney can advise you.