How Digital Currency Can Complicate Divorce
The way money moves around the world has changed dramatically over the past few decades, and nowhere is this technological advancement more evident than in the area of digital currency. Bitcoin is the most well-known and exists solely online without any regulation. This means the value can fluctuate wildly, but also that it is hard to trace. In recent years, the value of Bitcoin became front page news because of the extremely high amounts it achieved for a few months, though it did eventually even out to more moderate levels. The lack of regulation and accountability can create significant problems in divorce and serve as an outlet to hide assets the other spouse would otherwise be entitled to receive. In addition, valuing digital currency is far from easy, so being able to assign a fair value can prove challenging and put the other spouse at a disadvantage when dividing property. While each spouse is supposed to disclose all assets and liabilities, full disclosure does not always happen, especially if a particular asset is easy to hide. Understanding one’s rights in divorce is critical to getting a fair outcome.
A Vehicle for Hiding Assets
For any divorce to be fair, both sides need to be open and honest about what they want and what they have to bring to the table. A big part of this is accurate disclosure of all the property each spouse owns. The problem with Bitcoin is the anonymous nature of this currency that makes it hard to trace and easy to transfer to another person so that it is out of the control of a spouse. Tracking digital currency is not easy, and forensic and financial experts will need to be part of this effort. In addition, during the information gathering stage of discovery, evidence of large cash withdrawals, wire transfers or transactions to sites related to digital currency should be scrutinized. If the spouse has the digital currency in a virtual wallet, the endeavor becomes considerably harder, but asking pointed written questions could yield clues about the existence of an account. If that is the case, requesting the pass key to access the information is the next step. Note that spouses found to hide assets can be punished by giving the other spouse a greater share of the marital estate or even face contempt orders if they fail to produce documents. Consequently, a spouse should not give up on proving this issue if there is sufficient evidence that it is occurring.
Valuing the Currency
In addition to locating digital currency, the other main challenge with this kind of property is how to value it. Is it appropriate to value it at the purchase price, the date the case was filed, or when the divorce is finalized? Because the value of digital currencies can vary greatly from day to day, answering this question is crucial. Further, the trading markets do not close, as they do for the Stock Market, so even the time of day can matter. Asking for lump sum settlement to account for the fluctuating value of this asset may be presented as an option, but the fairness of this offer may not be readily apparent, as it requires waiving rights to future gains. Because of the relative newness of this asset, working with a divorce attorney is even more important to getting the best possible outcome.
Ask for Help
Both spouses have a right to split all of the assets accumulated during the marriage, not just those they want to divide. If you think your spouse is hiding assets or need help with dividing digital currencies, talk to the Tampa asset and debt division attorneys at All Family Law Group, P.A. about addressing this complicated issue. Without the right guidance you could lose tens of thousands of dollars in a divorce settlement. This is not the result you want. Contact the Tampa divorce attorneys and family lawyers at All Family Law Group, P.A. in Tampa Bay for a free consultation. They can be reached at 813-672-1900.