Divorce is not an easy process. It gets worse when lawyers have to deal with cases involving secrecy of owning cryptocurrencies or the cryptocurrency volatility and investment decisions.
Cryptocurrencies are making the process of divorces even messier. The issues make it hard to trace and value assets when parties must divide assets at divorce. Moreover, issues of secrecy arise when there is no full disclosure.
Since cryptocurrencies became better known last year and the price skyrocketed, more couples are finding themselves in awkward positions. For instance, some divorces come out of investment decisions where one partner makes the decision separately without involving the partner.
Toby Yerburgh, head of family law at Collyer Bristow in London told Bloomberg that he had handled cases where partners are concerned with hidden Bitcoins. In addition to that, such assets are hard to investigate given the privacy issues in the technology. These issues derail divorce processes and make them more costly and complicated.
Additionally, one party may not disclose all assets, and yet the judge may order a 50-50 split of assets. It means the other party will not get a fair share of the wealth. Volatility also makes it hard to do valuation. If a valuation is ordered today, the price will have changed the time it is complete and the time when assets are divided. Problems and arguments relating to valuation also arise when one partner invests some money in crypto, but the discloses the value is less after price drops down a few weeks later.
Jo Carr-West, a partner at London-based Hunters, said in an interview,
“It’s creating another layer of distrust that we haven’t had to deal with before. The public perception that there is a lack of a paper trail causes the anxiety”.
But the problem is not always the clients. In many cases, many lawyers haven’t handled Bitcoin cases and so are not familiar with the issues even when there are tools available to trace Bitcoin.
Victoria Clarke, a solicitor at Stowe Family Law in the U.K., told Bloomberg,
“Cryptocurrencies make things complex if you have a spouse who’s determined to hold on to their money, same as if they were hiding assets overseas. We have the tools to trace Bitcoin. The difficulty is that some lawyers don’t necessarily understand it yet. Thus, you need knowledge of the asset you’re trying to get hold of”.
Many lawyers are now considering it as a discovery process. Although, it’s not easy to get with depositing cash in Bitcoin. Courts are acquainted with attempting cases which need carefully considering assets.