When it comes to divorce, owning cryptocurrency can complicate a situation that may already be delicate. Splitting typical assets such as other funds and properties may already be a challenge. Now, there is an intangible and very valuable asset that can create additional disputes.
Bitcoin and similar cryptocurrencies are a trending form of investment. Bitcoin itself has been around for nearly a decade. However, its value has risen significantly over the last few years. Those who invested have reaped the benefits of trading and working with the currency. It is strictly digital and can be purchased, traded and transferred anonymously online.
Two big issues
There are two main issues when cryptocurrency is involved in a divorce:
1. Splitting cryptocurrency
Splitting anything in a divorce is often difficult. Cryptocurrency is no exception. This can cause a dispute if one spouse put more time and effort into trading and purchasing the currency and believes he or she is entitled to all of it. It can also be difficult if one spouse is unaware that the other has invested in it. However, it is still considered an asset and should be brought forward to discuss and split accordingly.
2. Hiding assets through cryptocurrency
Hiding any assets for any reason is illegal and can result in major consequences. The anonymity in trading or transferring cryptocurrency may appear to be an easy way to hide funds from your spouse. However, they can still be traced. Even though there are software services that offer ways to scramble accounts to render them untraceable, the owner can still be found. If you know or suspect your spouse has invested in cryptocurrency, watch for red flags such as large sums withdrawn from your account without reason.
Cryptocurrency can create more problems, as well, in a divorce case. One spouse may feel strongly about where he or she believes the currency should go or think he or she can get away with hiding funds in a secret account. Accounting for all your assets and watching for warning signs may be helpful if your soon-to-be ex-spouse has or may have cryptocurrency. If you are the one with cryptocurrency, being completely transparent and honest is in your best interest.