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How do couples divide cryptocurrency during divorce?

On Behalf of | Jan 3, 2022 | Divorce |

Depending on the circumstances of your divorce, asset division is often very complicated. This is especially true when it comes to cryptocurrency, which has become a hot commodity for many investors based on its high gains.

If you or your spouse purchased cryptocurrency during the course of the marriage, it will likely get included within your divorce agreement. Here are a few important points to keep in mind when working through assets for division.

How is value determined?

The value of cryptocurrency is extremely volatile. Even if you can pin down an accurate value, it is likely that value will change over years, months, or even weeks. Because you cannot predict how much a crypto investment will lose or gain, you must include specific terms regarding the division of this asset within your divorce agreement.

This entails determining an initial value, but also developing a strategy for dividing this asset should it change over time, usually by naming a percentage change that would trigger a difference in how to divide cryptocurrency.

How do you transfer these assets?

Asset transfer is often more complicated than with similar assets, such as stocks and bonds. This is because many people purchase and hold cryptocurrency on a personal level, meaning there is no financial entity like an investment company overseeing the transaction. Then there is the issue of security, as encrypted keys and passcodes must not fall into the wrong hands or both parties could lose out.

While very complex, it is possible to divide cryptocurrency fairly and equitably during divorce. The more information you have going into the process, the less stress you will experience during the asset division phase.