Cryptocurrency and Divorce

Cryptocurrency ("Crypto" for short) is becoming much more common as a significant asset to be divided in divorce. Bitcoin is the most familiar, however, there are thousands of other cryptocurrencies in circulation. Because of the digital, or virtual, nature and volatility of this form of currency, it raises a variety of issues. It is easy to hide, volatile and desirable.

 Easy to Hide

Cryptocurrency is a marital asset and needs to be disclosed as such on a financial statement. Given it is virtual, it is challenging to track and prove ownership. It is easy to hide. If one spouse is unfamiliar with digital currency, they may not even be aware of it. In mediation, the subject should be carefully vetted - there is no line for this on the Massachusetts Financial Statement.

 Volatile

Cryptocurrency is extremely volatile. When trying to divide a cryptocurrency account between spouses the value can fluctuate significantly from one day to the next. If there is any trade off of one asset for the cryptocurrency, the cryptocurrency may need to re-evaluated frequently, rather than a set date on which to value all the assets.

Desirability

One party may highly desire to retain the cryptocurrency account. This may help in negotiating a fair and equitable settlement. Even though it can be seen as a risky investment – the person that wants the upside may be willing to take less of something else.