Divorce requires two involved parties to disclose their entire assets as well as its values. Doing so allows these assets to be evenly split to both. However, the advent of cryptocurrencies has made the already difficult divorce process a tad more complex. For one, digital currencies allow anyone to conceal their holdings anonymously. Since no one, other than the cryptocurrency owner, has knowledge of his/her assets, the process of determining an individual’s net worth and assets would also be difficult. The separation process necessitates that both parties provide the value of their assets.
The absence of documents and valid identification to serve as solid proof of the existence of these digital assets further makes the divorce process lengthier and more expensive. Distrust is also sowed between two separating individuals as well as their legal representations. Claims and counter claims are also brandished unwittingly by both parties.
According to Jo-Carr West from Hunters Solicitors, cryptocurrencies are adding a level of distrust in the divorce process. She explained, “It’s creating another layer of distrust that we haven’t had to deal with before.” She added, “The public perception that there is a lack of a paper trail causes the anxiety.” Besides the difficulty of disclosing and discovering digital assets, the volatility of the cryptocurrency market makes valuation similarly difficult. The issue stems from how two parties could amicably divide a specific digital asset the value of which constantly fluctuates.
According to the head of Family Law at Collyer Bristow, Toby Yerburgh, “Often in a divorce, one spouse is looking for a pot of gold that doesn’t exist. But with cryptocurrencies, it’s possible the pot does exist.” An equal division of assets is usually seen in divorce proceedings in the US and UK. But with cryptocurrencies, the challenge lies in its decentralized nature, the legalities of which are currently unclear.