As divorced couples in Minnesota may have experienced firsthand, the process of dividing assets is a difficult one that tends to be contentious. The appearance of cryptocurrencies on the financial scene has only made the whole process all the more difficult, especially since many family law lawyers have little experience with this digital asset.
Cryptocurrencies complicate the divorce process in two main ways: To start with, these assets are easily hidden, and if the owner is a little tech-savvy, they can make their digital tokens untraceable. Granted, if the tokens were bought through an exchange, they’d be easy to track; however, if the owner bought them directly from someone else and moved them offline, these digital assets become very difficult to track, consuming a lot of resources in the process. As a result, it is important for owners to disclose their ownership of the assets during the divorce proceedings. Otherwise, they risk severe penalties, including giving the other spouse a larger share of the assets or going to jail for contempt of court.
The second problem with cryptocurrencies is properly valuing them. Their value fluctuates to such a degree that a person who bought bitcoin in late 2016 would have been able to increase their investment tenfold by the very next year and then lose half their money in the following three months. Consequently, figuring out how much crypto assets are worth depends on the time at which this value is measured, making lawyers wonder whether it is better to value these assets once the divorce papers are filed or as the assets are actually being divided.
Additional concerns problems are bound to come up. For instance, when it comes to security, it is important that the private key stays protected throughout the entire divorce process. Anyone about to go through a divorce might benefit from reaching out to an experienced family law attorney to handle all the nuances involved.