The rise of cryptocurrencies seems to be making divorce cases more complicated. Due to the couples concerned needing to come to an agreement on how their assets will be divided, there is now widespread discussion on how cryptocurrency as an asset, should be dealt with.
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While it’s easy to say that the split should be based on the value of a portfolio at the time of divorce, it begs the question of whether or not these cryptocurrencies should be revealed in the first place. BBC News indicated that those involved in bitter separations may turn to digital currencies to hide their wealth, especially considering the anonymous nature of these particular assets.
Cryptocurrency may be masked in several ways: owners can hide its existence from their partners and avoid declaring it as an asset altogether; they could also claim it was stolen via an online scam. Then there’s the possibility of offering their partner an ongoing percentage instead of agreeing to a 50% payment on the portfolio’s current value.
Coinwire reported that there are three divorce cases involving settlements of digital currency assets, and they include Bitcoin, Litecoin, Ripple, and Ethereum. One of the cases involves a settlement for £600,000 worth of digital assets, which is the result of an exponential market increase. They were originally bought for only £80,000. Vandana Chitroda, who’s a partner of the firm presiding these cases, mentioned that these are the first they’ve handled, but they expect to encounter more in the future.
Because there’s no established legal regulation on cryptocurrency, it’s uncertain how the cases will pan out. Legal specialists have conflicting views on how the cases should be settled. Vardags divorce barrister John Oxley said that it’s difficult to determine what power the court has because it’s not clear where cryptocurrency belongs in terms of property type. Since this is the case, it’s easier for a partner to just keep their digital assets and pay the equivalent value to the other party. Others believe splitting the assets is a fairer decision, because the value of the digital currencies can change rapidly due to market volatility.
Guidelines for Cryptocurrency
The Ministry of Justice has yet to set specific guidelines for cryptocurrency, but The Family Justice Council has drafted a guide that advises both parties involved to be honest about what they own and the income they have. This way, it makes the legal proceedings less complex.
Since disputes over digital currencies are now becoming commonplace, there has been an increasing demand for a clear public profile on them. Money International previously covered Europe’s call for stricter cryptocurrency policing, as Europol director Rob Wainwright thinks that criminals generate billions each year through illegal activities and yet their earnings are wiped clean through cryptocurrency. It’s easier to commit money laundering through digital means because currency can be moved anywhere without crossing borders. Because cryptocurrency isn’t governed by a central authority, law enforcement officers have no way of monitoring digital transactions.
Now more than ever, governments are being urged to act on these situations. Without any established standards, cases involving cryptocurrencies will remain difficult to close.
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