For many California spouses going through a divorce, one of the most difficult and contentious issues is the division of assets. This process is becoming even more complicated thanks to the growing use of cryptocurrency.
The main problems involving cryptocurrency as it relates to divorce include the ability to hide digital assets fairly easily and the difficulty of assigning a value to a type of currency that has a rapidly fluctuating value. Furthermore, cryptocurrencies have the potential to allow some individuals to accumulate considerable wealth from a small investment. Tracing assets of this nature that are purposely hidden from a soon-to-be-former-spouse can also present several challenges.
One way some accountants brought in as experts during divorce cases have been able to discover undisclosed crypto assets is with the careful examination of bank statements, especially if virtual currency was purchased via online exchanges. However, cryptocurrency purchased offline or directly can be almost impossible to trace. Some states are dealing with the difficulty of assigning a value to crypto assets by using the value at the time a divorce complaint is filed. However, many legal professionals argue that other factors should be considered, such as value at the date of distribution.
Hiding assets during the end of a marriage, whether they are traditional or digital, can have serious legal consequences. A family law attorney may use evidence of undisclosed assets as a means to secure a bigger chunk of marital assets for a client. Furthermore, a spouse hiding assets could also face jail time for contempt and other legal penalties.