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Cryptocurrency in divorce

On Behalf of | Aug 16, 2021 | blog

Anyone watching the news might know about cryptocurrency and how volatile it is, value-wise. As a digital currency that costs as much as anyone wants to pay for it, forms of crypto may go from being worth portions of a penny to thousands of dollars in a matter of days.

This makes it an attractive get-rich-quick scheme and many people want in on this relatively new concept of digital currency. According to CNBC, an estimated 20 million Americans may have cryptocurrency. That “may” is a problem though. Cryptocurrency is easy to hide, which makes it difficult to track when dividing marital property.

Cryptocurrency as an asset

Like hard cash, crypto is a valuable commodity. As such, Minnesota courts may consider it to be marital assets worthy of dividing. Once the courts have a bearing on how much the crypto is worth, it is just a matter of dividing the crypto between spouses or making sure one spouse has the crypto and the other spouse has an equitable amount of property in return.

Cryptocurrency as a hidden asset

Because of the way cryptocurrency transfers through encrypted channels, it is difficult to track down. That makes it an appealing avenue for people to hide it during divorce proceedings. According to the Journal of Accountancy, many forensic accountants have to come up with new ways of tracking crypto fraud.

Since crypto starts with an investment of another currency, there are entry and exit points accountants may find. Blockchain records also exist on thumb drives or hard drives that may shed a bright light on a spouse’s potential crypto wallet.

It is important to keep up with these trends. Cryptocurrency represents a brand new way to invest and manage assets, but it also shows how people might use these digital tools as a way of tipping the scales unfairly in a divorce.