Cryptocurrencies in Divorce
It’s still unknown what impact cryptocurrencies will have on the future economy, but today, zealous investors are still investing money in both mining Bitcoin and creating new cryptocurrencies. The question of whether these will have value ten years down the road depends on whether or not they can function in a global market. Today, transaction costs are very high and there are questions of whether or not there are speed issues as well. It’s one thing if a few thousand people across the globe are using Bitcoin in transactions. Quite another when it’s millions or billions.
Nonetheless, cryptocurrencies offer potential divorcees a unique way to hide their assets. Since the cryptocurrencies are 100% anonymous and untraceable, it’s become one more thing that divorce attorneys have to look out for when trying to reach a fair agreement.
Confusion Surrounding Cryptocurrencies
There is still a bit of legal confusion surrounding cryptocurrencies with the U.S. government attempting to make them illegal as a potential competitor to the U.S. dollar. If cryptocurrencies are indeed currencies at all, something that has been disputed by attorneys for Bitcoin, then Bitcoin would indeed be illegal. However, the U.S. courts ruled that Bitcoin, like gold, is actually a commodity.
Like gold, Bitcoin is someone difficult to find. For instance, if one litigant in a divorce has a Scrooge McDuck style emporium in which they hide their gold, the opposing attorney would have difficulty finding those assets if adequately hidden. Other stuff like real estate, expensive art, and investments leave a paper trail.
On the other hand, there is one way in which Bitcoin and other cryptocurrencies are not at all like gold. They are incredibly difficult to appraise leaving yet another legal gray area that divorce attorneys must learn to navigate.
Value of Cryptocurrencies is Highly Unstable
One of the main problems with evaluating a cryptocurrency is that the value tends to be highly unstable. Today, Bitcoin is valued at just over $7,000 American dollars. But in late December of 2017, the value peaked at over $20,000 per share. Of course, this reflected an investment boom that was buttressed by positive press among other factors. Beforehand, Bitcoin was best known for its use procuring illicit substances and hitmen over the dark web. From there, Bitcoin shot up with a meteoric rise as legitimate and well-respected investors decried that it was the future. However, limitations in scalability and costs per transaction have somewhat blighted their enthusiasm.
Nonetheless, a new lawsuit involving $11 million in Bitcoin is currently working its way through the federal courts. This is not a divorce case, but it involves the dissolution of a business. The precedent set in this case could pave the way to how Bitcoin is managed and handled in divorces as well.
Talk to a West Palm Beach Divorce Attorney
The West Palm Beach divorce attorneys at Bruce S. Rosenwater & Associates have successfully helped numerous couples plan and dissolve their marriages. For more information on how we can help you, talk to us today.
Resource:
law.com/dailybusinessreview/2019/11/25/finding-and-valuing-cryptocurrencies-in-divorce/?slreturn=20191112122335
cointelegraph.com/news/kleiman-v-wright-case-update-man-from-belgium-tells-judge-he-is-satoshi
https://www.rosenwater.com/state-representative-seeks-to-curb-high-divorce-rates-in-florida/
