In case you weren’t already worried about dividing up retirement funds, home equity, antiques, and stock portfolios, now you can add cryptocurrency to the list. If you are familiar with cryptocurrency, you may understand why it’s so difficult to divide. If you aren’t, you may wonder how much your spouse’s crypto is worth and if you are entitled to any of it.

We can help you understand your options and your rights as you move forward with dividing assets during your divorce. Schedule a consultation with Haygood, Cleveland, Pierce, Thompson & Short now by calling us at 334-821-3892.

How the Courts Look at Cryptocurrency

The world of finance changes quickly, and the courts tend to lag a bit when it comes to catching up. However, the court does view cryptocurrency as an asset, so it will be divided up if it was acquired during the course of the marriage. Any cryptocurrency earned prior to the marriage will still be considered a separate asset.

Why Cryptocurrency is So Hard to Valuate

Because of its nature, cryptocurrency is volatile. It is decentralized and its value fluctuates dramatically based on others’ buying patterns, comments in the media, and group buys. If you divide assets based on crypto’s value on one day, it could have a hugely different value by the time the divorce actually goes through. What do you do at that point? Do you renegotiate the contract or push it forward as is, knowing that someone will be treated unfairly because of it?

Use DOGE as an example. Dogecoin started out as a meme that was worth less than one cent per coin in early 2021. Its price suddenly increased because of its popularity on social media and it hit an all-time high of 68 cents per coin just a few months later. Now, over one year later, it hovers at 18 cents per coin.

Imagine a divorcing couple where one party initially bought $1000 worth of Dogecoin. It would be worth $10,000 at its peak but roughly 25% of that months later. The divorce process can take months or even years, and properly evaluating that asset can be a challenge.

What If My Spouse Hides Cryptocurrency?

One common concern is hidden assets. This is particularly troubling with cryptocurrency since it is relatively easy to hide from someone who is unfamiliar with it. The good news is that cryptocurrency is a hands-on investment. If your spouse got involved with it before you talked about divorce, you likely sat through many impassioned talks about changing prices and purchasing patterns.

If you know your spouse is into cryptocurrency, you can use that to ferret out their crypto assets during the divorce. Even if they deny having any cryptocurrency, you can likely still find it. If necessary, your attorney can connect with a forensic accountant who can trace your ex-partner’s hidden assets.

What to Do If You Are Awarded Cryptocurrency

If you do not have cryptocurrency and your ex-partner does, you may be awarded some of their crypto in the divorce. What comes next? You have options. Most people aren’t invested in learning about cryptocurrency and getting involved in day-to-day trading, so they opt to sell it.

You can also simply transfer the value of the cryptocurrency to other assets to end up with more cash in your pocket. For example, if you are awarded $30,000 in cryptocurrency and your partner is awarded $40,000 from your joint savings account, you may just decrease what they get in cash by $30,000 and call it even.

However, if you choose, you can also have the actual cryptocurrency transferred to your crypto-wallet. From there, you can buy more coins, explore other types of cryptocurrency, or use it to buy goods and services. You can also cash it out at any point but be prepared for serious fluctuations in value.

Explore Your Divorce Options with Haygood, Cleveland, Pierce, Thompson & Short

Maybe you’ve already decided divorce is your next step or perhaps you’re just starting to explore your options. Either way, the team at Haygood, Cleveland, Pierce, Thompson & Short is here to help you learn more about what comes next. Set up a consultation online or give us a call at 334-821-3892 to get started.