Problems cryptocurrency may cause in property division

| Mar 18, 2019 | Divorce |

If one or both people who are divorcing in Texas own cryptocurrency assets, getting an accurate assessment of their value could be difficult. Another potential issue with cryptocurrency is that it can be easier to hide than many other types of assets. Because cryptocurrency is so new, few professionals have much experience dealing with it as part of a divorce settlement.

The value of cryptocurrency can fluctuate quickly and significantly. One attorney in New Jersey says it may be necessary to change when assets are valuated, making it closer to the time of property division. A British lawyer has cited a case that involved cryptocurrency assets purchased for £80,000 that went as high as £1 million and then down to £600,000 between November 2016 and February 2018. He suggested assessing value throughout the divorce process. One expert has compared the challenges in fixing a value to cryptocurrency for the purposes of a divorce to that of appraising art.

Cryptocurrency can be purchased using an online exchange or directly. In the former case, it may be possible to trace the cryptocurrency even if a person attempts to hide it, but the process can be expensive and time-consuming. However, someone who buys cryptocurrency directly and moves it offline might be able to conceal it successfully.

Texas is a community property state, so most property acquired after the marriage is considered shared property and should be divided equally. Therefore, if a person has invested in cryptocurrency, even without the knowledge of the other spouse, it is likely that the spouse can claim half of its value. A person who is concerned that a spouse may be hiding assets could discuss the issue with an attorney. There are many other ways to hide assets, including creating shell companies, not reporting bonuses or other income, or just removing cash from an account.