‘Crypto divorces’ is a term that may sound a bit strange to many. With the growing adoption of the crypto industry, the number of crypto owners is increasing and so it is increasingly common for digital assets to become an important part of court cases during divorces. However, while most crypto investors may be preoccupied with other things, it will become a common scenario as more people enter the world of bitcoin (BTC) and other digital currencies.
Crypto divorces
Last year suggested market research firm GWI that 10.2 percent of global internet users between the ages of 16 and 64 own crypto. In addition claims the independent data and statistics tracker World Population Review that the global divorce rate ranges from 0.15 divorces per 1,000 people in Sri Lanka to peaks of 5.52 per 1,000 people in the Maldives.
Claire Walczak, a senior associate at independent law firm Lander & Rogers, says family law attorneys are currently seeing an increasing number of digital asset divorce settlements.
According to Walczak, so that the divorce proceedings have started, the court is following a process to determine how property and financial matters will be settled. The same process is used for cryptocurrencies and so both parties are required to disclose all documents about their crypto holdings.
Both parties have the right to keep the crypto as part of their total ownership rights, regardless of whose name owns it. If both parties want to keep the crypto and fail to reach an agreement, courts may consider factors such as who paid for the crypto and who owns the wallet.
Crypto can additionally be included in the prenuptial agreement. However, if there is no binding financial agreement, factors such as the length of the marriage, financial and non-financial contributions during the marriage, or whether one of the parties becomes the primary caretaker of any children will be relevant in the division of assets.
Keeping Bitcoin hidden from ex-partner
During the divorce process, disclosing crypto assets is a bitter pill to swallow for many. For example, you could recently read in the Bitcoin news that a stock of no less than 12 bitcoins had been hidden during divorce proceedings in New York. Since it is not easy to link a wallet to a specific person, it will probably not surprise you that attempts are often made to withhold bitcoin or other cryptocurrencies.
Today, however, there are more and more ways for forensic investigators to track down hidden cryptocurrencies through the blockchain.
