In recent years, one of the most prominent technological advances has been the introduction of cryptocurrency, a form of digital currency that can be easily traded back and forth between users. This technology adds a new asset that must be considered during property division in a divorce. If you are getting a divorce in New York, continue reading to discover how courts will divide cryptocurrency and work with an experienced Suffolk County property distribution lawyer for skilled legal assistance during your case.
What is Cryptocurrency?
Cryptocurrency is a type of digital currency system that uses cryptography to enable secure transactions. It is not controlled by a central authority like a government or bank; instead, it operates on a distributed ledger, called a blockchain. The blockchain records all transactions and issues new units to the chain link.
This currency acts as any physical money, allowing the buying and selling of goods and services. The most well-known cryptocurrency is Bitcoin, but other common systems include Ethereum, Tether, Ripple, and more.
How Do Courts Divide Cryptocurrency During a Divorce in NY?
Although cryptocurrency is a relatively new thing, it can still be a valuable asset. When a married couple decides to get a divorce, important decisions must be made to divide shared property. New York is an equitable distribution state, meaning that any assets accumulated during the marriage are considered marital property and will be divided fairly between spouses, not necessarily equally. Although cryptocurrency can be confusing to some, it acts as any other asset when it comes to property division.
Cryptocurrency must be identified in financial affidavits during the divorce to ensure transparency. Once the value of the digital currency that has been accumulated by each spouse has been determined, it can be divided equitably based on each party’s financial situation as well as the outcome of the rest of the property division. The court could order one spouse to digitally send the other their share, or liquidate the currency and exchange it in accordance with equitable distribution.
It is also important to note that the value of cryptocurrency is ever-changing. Crypto markets are volatile, meaning that the value of assets can fluctuate significantly and quickly. The court must determine whether they want to value the assets at the time of filing, the time of settlement, the date of the divorce decree, etc.
Can Cryptocurrency Be Hidden?
A major issue when it comes to dividing cryptocurrency in a divorce is that the funds are easily hidden. This currency is stored in online wallets and can be sent and requested in seconds, which makes it harder to track. Hiding assets is a major issue during divorce, but it is usually more difficult for a spouse to conceal assets when they are physical property or reside in a regulated banking system.
If one spouse intentionally hides or conceals cryptocurrency, whether by refusing to give the court access to the information or sending funds to a friend to hold onto during the divorce, it can make the equitable distribution process more complex.
For more information on property division and your legal rights during a divorce, reach out to a skilled attorney at Peter V. Mandi & Associates, Inc.
