Bitcoin and Divorce: Perils and Pitfalls
We are seeing increasing divorce cases that involve Bitcoin and other crypto currencies.
This Is Money reports that there have already been several divorce cases that involve Bitcoin. They rightly point out that discovery and tracing of this asset can be problematic for lawyers:
“Tracing cryptocurrencies could be enormously time-consuming and expensive. This is, of course, much easier if cryptocurrencies are traded via an online investment platform and bought with funds from a bank account, as the original value of the transaction can then be established. When cryptocurrency is purchased directly and moved offline, it becomes almost impossible to trace.”
For divorcing couples in Ontario, full financial disclosure is the norm. So, if you own Bitcoin or other crypto currencies you will need to disclosure these assets (and their value) to your spouse. If fail to disclose your Bitcoin then there is a chance that any Court Order or divorce agreement you enter into may be set aside if the asset is discovered later as result of this non-disclosure.
The relevant date to value the asset would be your date of separation (DOS). The Bitcoin may also be exempt from sharing if you brought this asset into the marriage and owned it on your date of marriage (DOM). The value of the Bitcoin on your DOM may be a deduction to any final sharing you do with your spouse. However, the value increase of you Bitcoin from your DOM to your DOS may have to be shared with your spouse.
You should engage the services of an experienced family lawyer if you are divorcing and you (or your spouse) own Bitcoin or other crypto currencies.
At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit us at RussellAlexander.com