If you don’t know what cryptocurrency is, it’s time to bring yourself up to speed. Individuals can now convert U.S. dollars and other currencies into digital currencies, which they hold in “digital wallets.” These cryptocurrencies exist apart from any standard banking system, and the only person who can access them is the individual who holds the private key. If that person does not willingly give up the private key, they can take that cryptocurrency to their grave.
This presents a unique problem for divorce proceedings — one not so different from if a spouse buys a massive sum of gold and buries it in a secret location. That gold — or the cryptocurrencies — will remain hidden and inaccessible by the court system. This, however, does not mean it’s legal to hide marital assets in the form of cryptocurrencies.
If one spouse owns a sum of Bitcoin, the spouse must disclose these assets during divorce proceedings. The spouse may also need to share these assets depending on how the court decides the matter. If the cryptocurrency — or the money used to buy that cryptocurrency — was earned after the date the couple married and before the date of separation, then it’s likely a part of the marital estate and therefore divisible.
Courts have methods of persuading a spouse to comply with their demands, even if they are trying to hide cryptocurrency or refuse to share their private keys. If you suspect that your spouse is hiding cryptocurrency from you, then you might want to discuss the matter with your divorce attorney to develop a strategy to ensure that you receive a fair marital asset distribution.