Cryptocurrency is a form of digital currency that’s becoming increasingly accessible for individuals in Kentucky and elsewhere in the country and around the world. It’s also an asset that’s presenting unique challenges for divorce attorneys. The nature of cryptocurrencies like Bitcoin makes it easy for soon-to-be-ex-spouses to hide such assets when it comes time to divvy up everything jointly accumulated or owned.
This type of property division can also become problematic since cryptocurrency values can vary greatly, often over short periods of time. Efforts to track down currency of this nature can be difficult but not always impossible. In one instance, a certified financial forensics accountant and fraud examiner was able to use bank statements to locate crypto assets a divorcing spouse failed to disclose on their statement of net worth. However, crypto assets purchased offline or directly are virtually untraceable.
The process of determining how much cryptocurrencies are worth during a divorce can be just as dicey. Some law firms handle this dilemma by valuing crypto assets several times throughout the divorce process. Some states default to using the standard of going by the listed valve when the divorce complaint is filed. Even this isn’t universally accepted as the standard reference point or date to use. Some legal and financial professionals believe other key dates like the date of distribution are more appropriate for digital currency that’s accumulated and purchased without the involvement of traditional third parties.
A divorce attorney helping a client find suspected hidden cryptocurrency assets may consult with a digital forensics expert to determine if such assets exist and, if found, how much they are worth. If a spouse with existing crypto assets wants to protect them in the event of a divorce, a lawyer may suggest creating a post-nuptial agreement or updating an existing prenuptial agreement.