In today’s digital age, technological advancements have undoubtedly transformed people’s everyday lives. In recent years, cryptocurrency has gained significant value due to its decentralized nature and increasing mainstream adoption, making it a viable alternative to traditional financial systems. With the continued growth and development of cryptocurrency in digital asset storage and transactions, we will likely see even greater mainstream adoption of this technology in the future. As such, when a couple decides to split, they often question how cryptocurrency will be divided. Please continue reading to learn how the complexities of cryptocurrency can impact divorce proceedings and how a knowledgeable Suffolk County Marital Property Attorney can help you protect your hard-earned assets.
What is Cryptocurrency?
A cryptocurrency is a digital asset or a form of currency that’s based on blockchain technology. You can buy, sell, spend, and trade on exchanges for regular goods and services, but cryptocurrencies are not derived from actual assets. Cryptocurrency has no intrinsic value. The value is strictly based on supply and demand. It’s crucial to note that most cryptocurrencies exist on decentralized networks. This means a disparate network of computers enforces it. Essentially, it can exchange digital assets through a computer network that is not reliant on any central authority, such as a government or bank.
Many people choose cryptocurrency because it provides cheaper and faster money transfers. Decentralized systems also don’t collapse at a single point of failure like most central authorities. However, the most significant benefit of cryptocurrency is that it’s nearly impossible to counterfeit because it is secured by cryptography. Bitcoin is one of the most popular forms of cryptocurrency.
How is Cryptocurrency Divided During Divorce Proceedings?
Cryptocurrency, unlike traditional assets, poses unique challenges to divorcing parties. This is because a spouse can easily hide or obscure these assets as they exist in decentralized networks and are secured by cryptographic methods. New York adheres to equitable distribution principles when dividing marital assets. This means that assets, including cryptocurrency, will be divided among the parties in a fair manner. However, that doesn’t necessarily mean an even 50/50 split. A judge will consider all relevant factors of the case to determine an equitable distribution of a couple’s marital property.
Whether cryptocurrency is subject to division ultimately depends on when it was acquired. If the cryptocurrency was accumulated during the marriage, regardless of who acquired it, it would be considered marital property and, therefore, subject to division. However, if one spouse accumulated it before the marriage, it would be regarded as separate property, which is not subject to division.
As you can see, cryptocurrency and divorce can be a tricky thing. Given the potential stakes, it’s in your best interest to contact a proficient attorney from The Law Offices of Susan A. Kassel, P.C., who can help ensure your rights are protected during these challenging times.
