During the divorce process, a couple must divide joint assets and finalize a settlement agreement. A key part of this involves being aware of all the debts and assets belonging to the couple. California residents might like to know about how cryptocurrencies like Bitcoin are influencing family law.
Cryptocurrency could make dissolving a marriage more challenging for a few reasons. First, cryptocurrency is difficult to trace, which means a person could try to hide assets with cryptocurrency. Online exchanges of cryptocurrency can be traced. However, directly purchasing the currency and then moving it offline could make tracking a transaction very challenging.
While tracing cryptocurrency can be an issue, it is difficult to say whether this will pose a problem in a significant number of divorces. This is due to the penalties that exist for trying to hide assets in a divorce. One could face contempt of court charges and time in jail. Additionally, the other spouse could receive a larger portion of joint assets.
Even when cryptocurrency is disclosed during divorce proceedings, another challenge is still present. When dividing assets, the value of the assets must be determined. Assets could be valued at the amount they are worth on the date of distribution or on the date a divorce complaint is filed. Between these two dates, the worth of cryptocurrency can shift dramatically. Market conditions can make the worth of cryptocurrency unpredictable. Multiple valuations of this currency may be needed during the course of a divorce.
When possible, it is better if a couple can work together to figure out divorce terms. This may allow a couple to distribute assets between them instead of selling these assets and splitting the proceeds. Negotiation or mediation may be necessary so that a couple can communicate and compromise when going through a divorce.