When Can Cryptocurrency Be a Factor in Divorce Proceedings?

 Posted on February 22, 2022 in Divorce

Getting a divorce will involve a variety of complex financial issues. During the property division process, a couple will need to evaluate all of their assets and debts and determine how they will be allocated between the spouses. While the physical items a couple owns will be a big part of this process, ownership of financial assets will also need to be addressed. In recent years, cryptocurrencies such as Bitcoin have become an issue that is more and more common in divorce cases, and spouses who own these types of assets will need to understand the role that they may play as they divide their marital property.

Cryptocurrency and Hidden Assets

While married couples are required to fully disclose all of the assets they own during the divorce process, there are many cases where spouses attempt to hide certain assets so that they will not have to share them. Cryptocurrency is becoming an increasingly common method of hiding assets. Transactions involving virtual currencies can be difficult to track since they are completed using private online accounts. Because of this, a person may attempt to convert money or other assets into cryptocurrency and transfer ownership of these assets to other parties or to foreign accounts in hopes that their spouse will not be aware of what they are doing.

A person who believes that their spouse may have attempted to use cryptocurrency to hide assets may look in a number of places to uncover these issues. Reviewing bank statements and tax returns may help a person determine whether money has been transferred to online accounts. However, because these transactions can be complicated, it may be necessary to enlist the services of a forensic accountant who can scour online blockchain records to uncover illicit transfers and any other attempts to hide assets.

Issues to Address When Dividing Cryptocurrency

Even if spouses fully disclose any cryptocurrencies that they own, determining how to divide these assets can be a complicated undertaking. In some cases, it can be difficult to understand the actual value of virtual currencies, and the fluctuation of prices can affect a couple’s ability to divide their marital property fairly. Spouses will also need to be aware of the tax consequences of transferring ownership of cryptocurrencies. In some cases, capital gains taxes may apply when these currencies are sold or if they are transferred from one spouse to the other. By discussing these issues with an attorney, a person can make sure they will fully understand the financial implications of dividing cryptocurrencies along with other marital assets.

Contact Our Homewood Property Division Attorneys

If you have questions about how cryptocurrency owned by you or your spouse will affect your divorce, The Foray Firm can advise you of your options and help you make the right decisions. We will guide you through the divorce process and make sure you will have the financial resources you need and deserve going forward. Contact our Joliet asset division lawyers at 312-702-1293 to set up a confidential consultation and get the legal help you need.

Sources:

https://www.nytimes.com/2022/02/13/technology/divorce-bitcoin-crypto.html

https://www.cnbc.com/2021/05/28/dividing-cryptocurrency-in-a-divorce-settlement-is-complicated.html