While most jurisdictions, including New York, now recognize cryptocurrency as property subject to division, the feasibility of dividing it can be complex. Similar to NFTs, crypto has surged in popularity, making its navigation difficult. If you or your spouse possesses this asset, please continue reading as we explore how it’s handled during a New York divorce and the importance of consulting with a dedicated Suffolk County Marital Property Attorney to safeguard your interests in such matters.
What is Cryptocurrency?
Cryptocurrency is a digital asset that functions as money but lacks a physical form. When used for purchases, you are essentially exchanging a digital key that represents the currency’s value, rather than physical funds. Its value fluctuates daily, making it a volatile asset, much like the stock market.
Unlike traditional currencies, cryptocurrency operates without a central governing body. Instead, sophisticated computer networks verify transactions, leveraging blockchain technology to record all activity on public networks.
Cryptocurrency can be acquired through “mining,” which is a process where computers solve complex mathematical problems to generate the asset. Alternatively, it’s commonly purchased from brokers.
How is Cryptocurrency Handled During a Divorce in NY?
Navigating divorce when cryptocurrency is involved requires a clear understanding of its treatment as marital property. In New York, any asset, including cryptocurrency, acquired by either party after the marriage date is typically considered a joint asset and therefore, subject to distribution during divorce proceedings.
New York is an equitable distribution state, meaning marital property is not automatically divided equally, but rather assets are distributed based on each party’s contribution to the marriage. The court will consider other factors when deciding how to divide cryptocurrency, including the duration of the marriage, the earning capacity of each spouse, and more.
One major challenge with cryptocurrency in divorce is its volatile nature, making accurate valuation difficult. The court will generally attempt to determine the asset’s value as of the date of separation.
Although cryptocurrency is a recent development, its handling in divorce cases demands the same level of transparency and legal examination as any other asset. It’s in your best interest to engage forensic accountants to uncover hidden assets and obtain accurate valuations for this digital asset. To ensure fair and equitable outcomes in your divorce involving cryptocurrency, you must embrace transparency.
When complex assets like cryptocurrency are part of a New York divorce, it’s crucial to understand your legal options. At The Law Offices of Susan A. Kassel, P.C., we are dedicated to helping clients achieve the best possible outcome in these challenging situations. Contact our team today for assistance with your divorce and complex asset matters.
