Cryptocurrency In Divorce

This blog contains affiliate links, which we may receive a commission for purchases. The decision is yours, whether or not you decide to buy.

Cryptocurrency is a digital or virtual currency that uses cryptography to secure and verify transactions, control the creation of new units, and operates on a decentralized system.

The increasing popularity of cryptocurrencies has led to a growing number of individuals considering them as assets during divorce proceedings.

In this article, we'll explore cryptocurrencies and how they are treated in the legal system, with a focus on the current situation in the UK.

We'll also answer some key questions related to cryptocurrency and divorce, such as should cryptocurrency be part of the divorce process, how cryptocurrencies are declared in a divorce, and how cryptocurrencies are split during a divorce.

Definition of cryptocurrency

Cryptocurrency is a form of digital currency that operates independently of a central bank and uses encryption techniques to secure and verify transactions.

The decentralized nature of cryptocurrencies means that transactions are recorded on a public ledger, providing increased transparency and security compared to traditional currencies.

Current UK law on cryptocurrency and divorce

The current treatment of cryptocurrencies in the UK legal system is still developing, but in general, they are considered a type of property and are subject to the same principles as other assets during divorce proceedings.

This means that cryptocurrencies can be divided as part of a financial settlement between divorcing parties. However, there are some challenges associated with valuing and dividing cryptocurrencies, as their value can be highly volatile and difficult to determine.

It's important to note that while cryptocurrencies are considered property, they may not be treated equally to other assets, such as stocks or real estate.

This is because cryptocurrencies are relatively new and there is limited legal precedent for their treatment during divorce proceedings. As a result, it's important for individuals to seek the advice of a qualified attorney who has experience in dealing with cryptocurrency and divorce.

Should cryptocurrency be part of the divorce process?

Cryptocurrencies should be considered as part of the divorce process if they form a significant portion of the couple's assets. Just like any other asset, such as stocks or real estate, cryptocurrencies should be valued and divided fairly between the parties.

This can be a complex process, particularly due to the highly volatile nature of cryptocurrencies and the limited legal precedent for their treatment during divorce.

How are Cryptocurrencies Declared in a Divorce?

Cryptocurrencies should be declared as part of the disclosure process during a divorce. This means that each party must provide a full and accurate picture of their assets, including any cryptocurrencies they own.

It's important to note that failure to declare assets, including cryptocurrencies, during a divorce can result in serious consequences, including fines and even imprisonment.

How are Cryptocurrencies split during a divorce?

The division of cryptocurrencies during a divorce will depend on the specific circumstances of the case and the laws of the jurisdiction. However, in general, cryptocurrencies will be treated as a type of property and divided in a manner that is fair and equitable to both parties.

This may involve selling the cryptocurrency and splitting the proceeds, or it may involve one party transferring a portion of their cryptocurrency to the other.

It's important to seek the advice of a qualified attorney who has experience in dealing with cryptocurrency and divorce to ensure that the division of cryptocurrencies is handled correctly.

3 of the most well know cryptocurrencies

1. Bitcoin (BTC)

Bitcoin is the first and largest cryptocurrency, founded in 2009. It's often considered a store of value and is widely used for online transactions. https://bitcoin.org/

PHOTO: ALESIA KOZIK

2. Ethereum (ETH)

Ethereum is a decentralized, open-source blockchain platform that was founded in 2014. It's often used for decentralized applications and smart contracts. https://ethereum.org/

PHOTO: MOOSE PHOTOS

3. Cardano (ADA)

Cardano is a decentralized platform that was founded in 2015. It's designed to provide a more secure and sustainable platform for the development of decentralized applications and smart contracts. https://cardano.org/

PHOTO: K ANCHANARA

In conclusion, the treatment of cryptocurrencies in divorce proceedings is still a developing area, but they are generally considered a type of property and are subject to the same principles as other assets.

It's important for individuals to seek the advice of a qualified professional who has experience in dealing with cryptocurrency and divorce to ensure that the division of cryptocurrencies is handled correctly.

While the highly volatile nature of cryptocurrencies can make the process of valuing and dividing them challenging, it's important to take them into consideration if they form a significant portion of a couple's assets.

The top three cryptocurrencies mentioned above, Bitcoin, Cardano, are just a few examples of the many digital currencies that are available today and should be considered as part of the divorce process.
PHOTO: JONATHAN BORBA

Books

Buy now from Amazon

Podcast

This personal finance podcast is for women, including female entrepreneurs to learn personal finance, money mindset & practical money management tips to be financially confident. To get in control of money, to budget, gain financial confidence, learn how to invest, save money & manage money mindset and behaviours. Hosted by a multi- award winning qualified financial planner and financial coach.