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Family and Criminal Law Blog

Tuesday, March 6, 2018

Bitcoin and Divorce

How can cryptocurrencies complicate a divorce?

Cryptocurrencies have heightened tremendously in popularity in recent years.  Digital currencies like Bitcoin, Litecoin, and Ethereum allow internet users to purchase digital assets with relative anonymity.  Many users feel that cryptocurrencies represent the future of money as the currency cannot be counterfeited, allows for immediate settlement, can be accessed by anyone with the internet, and offer lower fees.  Already, leader Bitcoin has skyrocketed in value since its original inception.  Despite the potential benefits of cryptocurrencies, the existence of cryptocurrency can lead to complications when couples divorce.  Our Texas divorce lawyers examine how divorcing spouses can uncover and fight for their share of cryptocurrencies below. 

Cryptocurrencies Can Be Concealed 

When you divorce, you and your spouse will be required to carefully disclose all of your assets.  Failure to make a full accounting could invoke penalties in court.  When it comes to cryptocurrencies, some spouses may be leery of disclosing an asset that can so easily be concealed. Cryptocurrencies can be purchased anonymously, making it difficult for spouses to uncover the existence of undeclared digital assets. 
Already, courts in the UK are warning divorcing couples to disclose their digital assets to avoid negative repercussions in court.  Divorcing spouses worldwide have turned to employing the services of so-called digital forensic experts who will investigate and determine whether a spouse is attempting to conceal their funds in cryptocurrency.  Courts everywhere are bracing for an onslaught of divorces involving cryptocurrencies in the near future. 
Complicating matters further, currently there is not a system in place to seize cryptocurrencies like there exists for funds in a traditional bank account.  This may make it more difficult for courts to manage divorcing spouses that refuse to turn over alimony, child support, or other court-ordered payments when their funds are held in digital currencies.  
For now, divorcing spouses should alert their attorney if they suspect their soon to be ex has invested marital funds into cryptocurrencies.  Your lawyer can assist you in securing a digital forensic expert who can trace the existence of these funds.  If your spouse is caught concealing assets, the court could order that you receive a greater amount of the marital assets then you would otherwise have received or your spouse could even face criminal charges.

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