For many married couples in California, finances are discussed frequently and openly. Both parties likely know where the family’s money is invested, how much money the family has and what debts they have. When a couple in this situation divorces, it is easy to lay everything out on the table. However, family law attorneys are increasingly facing a unique challenge in that one or both of the divorcing parties might have secret investments in cryptocurrencies. Tracing these investments, determining their value and dividing them based on current law is a time-consuming, expensive and challenging process.
A lot of this stems back to what made cryptocurrencies so popular when they came on the scene in 2009. Cryptocurrencies attract people because they can be anonymous. When carried out the right way, a person can invest a relatively small amount of money in cryptocurrencies and watch that small investment grow into a large amount of wealth, and no one else needs to know about it. This is why a lot of people refer to cryptocurrencies as the new offshore account.
Cryptocurrencies are volatile, passive assets that fluctuate based on market conditions. This means that the value of a cryptocurrency investment on the date that the divorce was filed can be drastically different from the value of the investment on the date of distribution. This makes it difficult to determine how this investment should be divided during the divorce process.
A divorcing individual who believes that their spouse may have a secret cryptocurrency investment would do well to discuss this concern with their family law attorney. Their attorney may be able to advise them on steps that they can take to have an equitable divorce proceeding. The attorney may also be able to provide advice on things like dividing property, dealing with joint accounts and determining the value of assets.