In a divorce, some assets are easier to split than others. In recent years, a new asset with unique challenges has emerged: cryptocurrency. West Virginia individuals going through a divorce should be aware of the following possibilities and pitfalls of divorcing someone with personal or shared cryptocurrency assets:
- Cryptocurrency is harder to trace: Cryptocurrency assets are not tied to a formal bank and are stored through a virtual “wallet” with a private key. This makes it more difficult for spouses to trace these assets. As such, some may be tempted to use cryptocurrency to “hide” assets. Subpoenas can be used to combat this, but it is certainly something that would-be exes should be aware of and on the lookout for.
- However, there are many ways for courts to find out about these assets: Review of undeclared payments, evidence stored on electronic devices and other forensics can all be used to identify if someone is hiding such assets. It is therefore very ill-advised to be less than forthcoming about these assets.
- Using cryptocurrency to hide assets can have serious consequences: If a court believes one party is not being forthcoming about assets, it will hurt their position in every aspect of the divorce. Making full disclosure regarding cryptocurrency holdings and how to access them will help move a divorce along far more smoothly.
The process of dividing assets with volatile valuation, such as cryptocurrency, presents its own set of challenges. Research on the holdings’ value and stability is a must when making an ask about one’s “share” of the asset, should liquidating it not be an option. Working with a West Virginia lawyer to make sure the language of the agreement clearly explains how the asset will be divided is very important to make sure everything goes smoothly.