Some California investors with the means to do so are exploring their options with a type of virtual or digital currency known as cryptocurrency. There is nothing wrong with simply purchasing or selling digital currency. It can, however, become a problem if marital assets involve cryptocurrency. First of all, this type of currency is often difficult to value since prices can fluctuate significantly over a short period of time.
Another way that divorce involving cryptocurrency can become complicated is if a spouse attempts to hide such assets. The process of tracking down digital currency is sometimes costly and time-consuming but not always impossible. In one instance, a financial expert was able to find crypto assets by looking through bank statements since purchases were made via online exchanges. However, cryptocurrency purchased directly and offline can be nearly impossible to trace.
In order to fairly divide cryptocurrency assets in a divorce, some states are using certain reference points. For instance, some states go by the value of assets at the time a divorce complaint is filed. However, there are some legal and financial professionals who believe the date of distribution is more appropriate for digital assets of this nature. It should be noted that any attempt to hide assets during a divorce can have serious legal consequences for either party, including jail time for contempt.
With a high-asset divorce involving cryptocurrency, a family law attorney might bring in a digital forensics expert to identify and valve such assets. Consideration may also be given to how much each spouse invested in cryptocurrency during the course of the marriage. There may be an additional need to address how future revenue from jointly purchased cryptocurrency would be handled post-divorce. A lawyer might suggest making this determination in the divorce agreement to avoid future legal fights over assets.