There’s an awful lot of buzz in the news about “cryptocurrency,” which refers to any form of currency that exists either digitally or virtually and is secured by cryptography, enabling bearers to use it for secure online payments without third-party involvement. Cryptocurrency — of which the most well-known is Bitcoin — is not issued by any central authority such as the U.S. Department of Treasury. Instead, it is “mined” or purchased from cryptocurrency exchanges, making it purportedly immune from government interference or manipulation. It’s not often used to purchase goods or services; instead it’s more typically used for trading and investment.
This sounds exotic, but as of late 2021, roughly a third of American adults under 30 had invested in or used crypto, with the numbers on the rise.
As crypto has become more commonplace it has caused issues in the divorce process.
That’s because crypto-based assets, which are traded on a decentralized network, can be highly lucrative investments but are difficult to track, making it tempting for a spouse to underreport how much they have or to try and hide it in “online wallets” that can be challenging to access without the “digital key.”
Crypto can also be difficult to value, given its volatility and many different types are on the market, which makes it hard to determine how to divide it.
The takeaway is that if you and/or your spouse have cryptocurrency, it’s important to work with an attorney who is familiar with this new type of asset and in a position to negotiate a fair division and who can help you track down holdings if you believe your spouse is concealing them.