In the past decade, cryptocurrencies like Bitcoin have surged in popularity in part because of their novelty, but also because of the ease with which they can be hidden.
Because cryptocurrencies are a purely digital form of money that are not issued, monitored or regulated by a central bank, they are ideal for hiding wealth.
This presents a problem in divorces in which all assets including cryptocurrencies like Bitcoin must be disclosed, valued, and divided.
If you are about to proceed with a complex divorce, it will help to have a qualified divorce attorney on your side. Devon Slovensky has helped Virginians through all different types of divorces. With years of experience, Devon Slovensky and the attorneys at Slovensky Law Firm are here to help you with your divorce, no matter how complex the details of the assets may be.
How Do You Discover Concealed Cryptocurrencies?
Although many people try to conceal their cryptocurrencies during a divorce, it is extremely rare that someone who has acquired a substantial amount of this precious asset will remain silent about their newfound wealth.
Most people boast to friends or family about such a jackpot, making it relatively easy to uncover such a deception.
Once it is confirmed that your spouse has a hidden cache of cryptocurrencies, a digital forensics expert can usually find some or all of it using public transaction histories. Because popular cryptocurrencies like Bitcoin rely on Blockchain, there is a public ledger documenting all Bitcoin transactions.
How to Determine the Value of Cryptocurrency Assets
In a divorce in Virginia, cryptocurrency assets are considered property that must be appraised and divided fairly.
This may sound like a simple act, but it can be challenging from a technical point of view. This is because there is no formal market for many cryptocurrencies, so it can be difficult to choose a conversion rate.
Even if there is a popular market that reliably values the cryptocurrency in question, these markets fluctuate rapidly. The Fair Market Value could easily be half or double in just a week, which makes courts have difficulty trying to equitably distribute crypto assets in a timely manner.
The Many Challenges of Dividing Cryptocurrency Assets
The first challenge in dissemination of cryptocurrency assets is collecting them. A court can order repossession of them, but the owner does not have to disclose where they are located or how to access them.
Another obstacle is determining a fair division. If both spouses were equally responsible for their acquisition, then the cryptocurrency assets can merely be divided in half and given to the two parties.
However, if assets are not easily divided, then digital assets may need to be first converted into cash. This once again raises the question of what is the Fair Market Value of such a volatile commodity.
Contact Slovensky Law today
It is currently quite rare for a divorce to involve cryptocurrencies, but as their popularity grows, so too will the number of cases. If you and your spouse have digital assets that could be a point of contention in an upcoming divorce, then you should talk to a divorce attorney who thoroughly understands the many issues surrounding them. Contact Slovensky Law today to get started.