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How Is Cryptocurrency Divided in a Divorce?

Traditional assets like real estate and bank accounts still factor into final divorce settlement property divisions, but digital technology has added something else into the mix: cryptocurrency. Millions of people have some form of it (Bitcoin, Ethereum, Solana), and use it to store value and for a form of exchange. It is now considered to be an asset class. Spouses may use cryptocurrency to hide their money during divorce proceedings and tracking it down can be difficult. Here’s how these situations are handled.

Is Cryptocurrency Considered to be Marital Property?

Currently, cryptocurrency is treated like other assets in divorces. If the cryptocurrency transactions took place during the marriage, they might be considered marital property. When cryptocurrency is determined to be marital property, splitting it up is not always easy. The value of cryptocurrency is quite volatile and can change quickly from day to day. Since divorces take time, an initial valuation might be meaningless after a month, week, or even a single day has passed.

Hiding and Finding Cryptocurrency

Spouses may try to hide cryptocurrency assets, and it is easier to do so when the other is unfamiliar with this market. The public has become more aware of how these assets work, and so have divorce attorneys. A spouse might suspect that their cryptocurrency (or other assets) is being hidden when the soon-to-be-ex has a sudden source of income that is not related to their other investments or existing employment. Forensic experts who specialize in locating hidden cryptocurrency might search for:

  • Credit card statements, bank statements, and other documents that show crypto purchase transactions.
  • Crypto transactions on tax returns
  • Cryptocurrency tickers
  • Keys for digital wallets
  • Login credentials for exchanges

Dividing up Cryptocurrency

During divorce proceedings, cryptocurrency assets will be classified as marital property, community property, or separate property. State laws determine how cryptocurrency is classified and split up.

New Jersey follows the equitable distribution process for dividing up property in divorces. While courts in community property states try to divide up property as close to 50-50 as possible, equitable distribution is based on a divorcing couple’s specific circumstances and fundamental fairness. Decisions are based on factors like:

  • All income and property that was brought into the marriage
  • Each spouse’s age, physical and emotional health
  • How long the marriage lasted
  • The economic circumstances of both spouses
  • The established standard of living that existed during the marriage.

Courts also look at parenting needs, debts, liabilities, earning capacity, if one spouse worked/contributed to the other’s education, and tax consequences. Other factors might also apply, as every situation is different. Spouses can also design prenuptial agreements that specify for certain assets to be protected in case of divorce.

A Marlton Divorce Attorney at Goldstein & Mignogna, P.A. Can Help You with the Equitable Distribution of Cryptocurrency and Other Assets

Dividing up cryptocurrencies can make the divorce process more complicated than it already is, but a knowledgeable Marlton divorce attorney at Goldstein & Mignogna, P.A. can assist with locating or protecting these assets. For a confidential consultation, complete our online form or call 856-890-9400. Our Marlton, New Jersey offices serve clients throughout South Jersey in Marlton, Burlington County, Camden County, Gloucester County, and statewide (ART).

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