What Happens To Your Bitcoins In A Divorce?
As the world of crypto grows ever larger, divorce lawyers are finding more and more that they are having to deal with a whole new class of assets. Whilst they are familiar with the redistribution of many types of assets, such as traditional cash, bank accounts and other investments, cryptocurrencies is relatively new ground.
One of the main problems that lawyers face is the lack of traceability of cryptocurrencies; not to mention their volatility and liquidity. If a spouse does not disclose a holding of digital currencies, they cannot easily be traced and identified, unlike other assets.
One of the appealing things that draws investors to cryptocurrencies is the anonymity. This is what Bitcoin prided itself on when it was first developed. But the feature that made it so appealing is also what has made it hard to prove in divorces. Suspicion that someone might have invested in digital currencies simply is not enough, and it is something that could potentially cost the English courts a lot of money to prove.
The second issue they face is due to their volatility. It is very difficult to fairly distribute an inherently volatile asset. Divorces have different ways in which they distribute monetary assets and risk laden ones, which poses a lot of problems when you consider that cryptocurrencies incorporate both. Assuming that the digital currencies have been disclosed and they can be identified, they belong more to the risk laden assets, but a fair balance will need to be struck in order to achieve fairness between the spouses.
The way in which cryptocurrencies are dealt with in a divorce setting needs to be clearer, as digital currencies are not going anywhere quickly. Nearly one fifth of 18-24 year olds considered Bitcoin to be an attractive investment opportunity in a recent UK survey. This means that divorce lawyers and the courts will have to be flexible and willing to adapt quickly on how to handle Bitcoin and other cryptocurrencies in a divorce settlement.
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