Why Cryptocurrency Can Be Problematic in a Divorce

cryptocurrency in divorce

Cryptocurrencies are on the rise. From the longstanding Bitcoin to the joke-turned-serious Dogecoin, more and more Americans are choosing to invest their US dollars in what appears to be a secure and inflation-proof system operating beyond the auspices of governmental bodies. Self-directed individual retirement accounts that radically expand the boundaries of what investors can use to save for retirement increasingly include cryptocurrencies as part of a properly diversified portfolio.

However, the safety of cryptocurrency funds is proving itself to be a little too safe. When couples seek divorce and an equitable division of assets, cryptocurrency is legally very much in play yet often difficult to reach—and when you do reach it, do you have what you thought you had? Here’s why cryptocurrency can be problematic in a divorce for this and other reasons.

Navigating the Blockchain

What does one truly own when they own cryptocurrency? There are no physical assets, as with precious metals, nor deeds to physical assets, as with real estate. Instead, the owner has a “private key,” a serial code that gives the owner the right to spend the currency. Without being able to locate the private key, which lies beyond our traditional financial institutions, many divorce attorneys struggle to make crypto accounts available to their clients. Meanwhile, evasive investors attempt to shelter their money from settlements.

Fluctuations in Value

Any stock market observer knows that values rise and fall over the course of a day. The same is true for cryptocurrencies. However, the volatility that cryptocurrencies experience can make even the most rollercoaster-like stocks feel like child’s play.

Take, for instance, the saga of Elon Musk and Dogecoin. With the currency’s value around $0.70 USD, the eccentric billionaire wrote off Dogecoin as a “hustle” during his appearance on Saturday Night Live, sending its value plummeting to $0.49—a 30-percent drop.

With cryptocurrency values changing by the hour, it can be difficult to ascertain what a spouse is entitled to. As such, maintaining an equitable split becomes a moving target, with other assets drifting in and out of consideration to account for fluctuations.

Retrieving Hidden Funds

Though cryptocurrency can be problematic in a divorce, tenacious legal representation can overcome even the savviest efforts to hide money in the blockchain. The property division lawyers of Schiller DuCanto & Fleck are skilled in doing what it takes to make sure their clients get what they’re entitled to in a divorce settlement, no matter where those assets may be hiding.

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