Cryptocurrency and Divorce: Should Your Online Assets Be Part of the Settlement?
It’s never wise to finesse your spouse; particularly if the two of you are currently engaged in a bitter divorce proceeding. That’s because when tempers flare, people are bound to cheat the law. And speaking candidly, no one would want to hand over their precious assets to someone they’ve come to loathe overtime!
It’s pointless to try and keep your assets under wraps
Hiding property is one of the ways in which people try to trick their ex’s lawyers. The truth is, it rarely works. Like birds to a carcass, your ex’s lawyers will circle the entirety of your estate, and search through every nook and cranny until your full possessions are determined.
So when a married couple decides to call it quits, the property has to be divided between the two aggrieved parties. How it’s executed depends largely on the laws of a given state and the type of divorce taking place. It could be through equitable distribution or by dividing the spouses’ community property.
Even a portion of the money that you hid in your backyard in 1989 is rightfully entitled to them by law. And as sad as it sounds, it’s all by the book.
So what about your bitcoin?
Cryptocurrency is a relatively new player in the finance market. In fact, nearly a decade ago, you could buy hundreds of bitcoins for a couple of bucks. Today, bitcoin has churned out millennial millionaires who are now living the American dream; all thanks to a witty investment they made a few years back.
Regardless of the situation, cryptocurrency is still an asset and hence, should be disclosed during the proceedings of a divorce. However, the real problem surfaces during enforcement. The fact that bitcoin is an unregulated market means there is no government intervention. So even if your spouse knows that you’ve got bitcoins worth millions of dollars, there’s no way they can get access to it. It could just be a calculated guess for all the court knows!
In fact, bitcoins have become quite the heated debate amongst legal experts and financial analysts alike. The way in which cryptocurrency allows anonymity is quite alarming! And as risky as it sounds, hundreds of people are still diverting their assets to cryptocurrency to hide them from their ‘significant’ others.
What can the government do about it?
Now, there’s a big difference between hiding and investing money in cryptocurrency. And herein is where the problem lies. How can the court successfully determine that your aim was to liquidate your assets and hide that money through cryptocurrencies?
Technically speaking, if your spouse can successfully prove the existence of your bitcoins (perhaps by having access to your bitcoin accounts), then he or she has a lawful right over a portion of them. But with the presence of the dark web, people are hiding their cryptocurrencies in such risky places that even the long arm of the law can’t reach. They would rather lose it all than let their spouses see a glimmer of it!
So the government is just about helpless in such a situation. Perhaps the only other option is to monitor your spouse’s bank accounts and legally request for regular bank statements before finally agreeing to a settlement. You might just get wind of a large influx of money of which they are unable to explain its whereabouts. Though it’s highly unlikely, the pressure might force them to spill the beans as to where they’ve hidden some of the assets in terms of cryptocurrency.
These are the loopholes that have got advocates calling for government intervention in the cryptocurrency market. In fact, some analysts even predict that cryptocurrency might cause a hazardous financial ripple across the world. It’s deemed to be a classic case of the bubble effect! The world will have to wait and see.
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