Dividing assets between spouses is known to be a detailed and time-consuming process, but with bitcoin now being thrown into the mix, the process is becoming even more challenging.
Bitcoin, a cryptocurrency, is a new form of money in the form of electronic cash. Created back in 2009, it’s now seeing a rise in popularity. Usage of bitcoin has become more of a mainstream occurrence in the past couple years. With more and more people seeking out new ways to invest and build their assets, its growing value is starting to have an impact.
The challenge with bitcoin is that it’s hard to assign value to, and both possessing and transferring it can be difficult to trace. While the value of the cryptocurrency has increased since its inception in 2009, bitcoin never remains at the same price. It can fluctuate over time and even throughout the process of a divorce.
Bitcoin is used electronically over a peer-to-peer system on the internet, which means there are no banks or government entities involved and there’s very little regulation tied to the new currency concept. There is also no paper trail. All you need in order to use or transfer bitcoin is an electronic “wallet” that is virtual and doesn’t have your name attached to it.
The lack of regulation, a value that’s difficult to determine, and seemingly anonymous transactions means that there’s a greater chance that a spouse with bitcoin may be able to hide it. Hiding assets is not a new concept — a spouse hiding bitcoin can be likened to someone hiding money overseas. But the discovery process for finding hidden bitcoin is something that requires the right tools and a bit more digging.
If a spouse does not disclose their cryptocurrencies from the beginning, an attorney may be able to trace the original transaction they made through an online exchange or from funds in their bank account. But once the bitcoin is transferred to their virtual wallet or account, the value is much harder to determine without knowing every transaction they’ve made.
The best thing spouses can do to ensure a smooth and timely separation is to be upfront about all of their financial assets from the beginning. This will make it easier to divide everything 50-50, which is how assets are split in the state of Nevada. Because the value of bitcoin fluctuates so frequently, it’s easiest to divide the bitcoin assets in half without attempting to calculate the current valuation.
While bitcoin and other cryptocurrencies are a new issue for divorce courts, the right divorce attorney can help mitigate any complications and guide you as smoothly as possible through the process of dividing your assets. For a personal consultation, call us today.