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Cryptocurrency increasingly a sticking point in divorce

On Behalf of | Mar 7, 2022 | Property Division |

Readers of divorce news may have noticed a new trend: battles over cryptocurrencies. As the value of cryptocurrencies such as Bitcoin have soared, they are becoming ever-bigger pieces of the marital estate. With each passing year, they are becoming an increasingly common sticking point in the property division process.

The surge

Bitcoin is now valued between $40,000 and $60,000 per unit, but it originally sold for a fraction of a penny. This means that a relatively minor investment a few years ago could, literally, be a fortune today. Even recently, coins, like Dogecoin, shot up a thousand percent in the course of less than a year. And, many other cryptocurrencies saw these same dramatic changes in value over the last few years. Indeed, something that may have been a joke purchase may be the largest marital asset now.

Not all crypto is gold

For our Brighton Howell area readers, remember that not all crypto is some magic “get rich quick scheme.” In fact, the vast majority of crypto is largely worthless and will likely never be worth even a penny per coin.

Hard to track

Unlike any other asset class, crypto can be extremely hard to track. The anonymous nature of crypto is actually built into just about all blockchain currencies. They are meant to be largely unregulated, decentralized and anonymous. This means that, if one spouse does not know they exist, the other spouse may have the ability to hide significant assets. There was actually a recent case where a husband left the country with millions in cryptocurrency saved to a physical crypto-wallet that was inaccessible to the wife that was left behind.

Financial investigators

This difficulty to track is why financial investigators have gained popularity in Michigan and throughout the United States. They have the ability to track down crypto when most, if not, all other attempts have proven futile. Of course, this is not always possible, but many divorce attorneys are now contracting with them to find large hidden assets.

Property division

For our Brighton Howell area, Michigan, readers, crypto will only continue to encroach into the divorce property division process. This is why it is important to check in on the marital assets periodically.