Tag Archive for: digital assets

What Your Lawyers Aren’t Telling You About Cryptocurrency And Divorce

Cryptocurrency has moved from niche curiosity to a mainstream financial reality. Whether held as an investment, used for business, or received as payment, digital assets now appear on more balance sheets and in more divorce filings. 

For couples navigating the end of a marriage, crypto introduces unique legal, valuation, tax, and enforcement challenges. 

This guide explains what you need to know in 2025: how courts are treating crypto, practical steps for preserving your rights, important tax and regulatory updates, and how Masters Law Group can help protect your interests.

Why Crypto Matters in Divorce

Cryptocurrencies, bitcoin, Ethereum, stablecoins, tokens, and even NFTs are usually treated as property for legal and tax purposes. That means they’re potentially divisible marital assets, subject to disclosure and distribution under state laws governing equitable distribution or community property. Yet unlike a bank account or a house, crypto’s features (pseudonymous wallets, self-custody, rapid price swings, and cross-border exchanges) make discovery, valuation, and enforcement more complicated. Courts and practitioners increasingly must adapt traditional asset-division tools to this new asset class. 

Four Practical Challenges Unique to Crypto

  1. Disclosure and hidden holdings: Crypto can be moved quickly, split across many wallets, or stored on offshore platforms. One spouse may overlook (or intentionally hide) holdings, send assets to friends, or convert crypto to fiat before trial. Full, early disclosure is essential, and forensic accountants or blockchain tracing tools are becoming standard in contested cases.
  2. Valuation volatility and timing: Crypto prices can swing dramatically in short periods. Parties and the court must agree on a valuation date and method (e.g., market price at petition date, trial date, or an average over a period). Clear contract language in settlements about valuation and future price movements helps avoid later disputes.
  3. Tracing and commingling: If one spouse used marital funds to purchase crypto and later transferred it to a separate wallet, courts will look at tracing rules to determine whether the asset remains marital or has become separate. Commingling crypto with jointly owned funds (for example, transferring crypto into a joint account or spending jointly) can complicate the analysis. 
  4. Custody of private keys and enforceability: The person who controls the private keys effectively controls the asset. Even after a court orders distribution, enforcing that order can be tough if the holder refuses to cooperate or deletes keys. Solutions include supervised transfers, escrow arrangements, requiring exchanges to freeze accounts when possible, or awarding equivalent value in other assets. Law firms increasingly draft very specific division instructions (wallet addresses, transfer steps, timing) into settlement documents to make orders enforceable. 

Recent Regulatory and Economic Context (2024–2025): Why it Matters to Divorce Cases

Crypto and Divorce

Crypto’s legal and tax landscape has evolved rapidly, and divorce practitioners must factor these changes into planning and settlement drafting.

Tax and reporting developments. The IRS continues to treat virtual currency as property; taxpayers must report transactions and income from digital assets. Recent IRS guidance and updates have emphasized reporting obligations and clarified treatments for things like hard forks and staking income. Moreover, increased reporting by exchanges (including new reporting frameworks implemented since 2024–2025) means tax authorities have better visibility into accounts, which also makes it easier for the spouse seeking disclosure to obtain evidence.

Regulatory momentum. In 2025, the SEC and other U.S. agencies have been active in staking out regulatory boundaries for digital assets, releasing staff statements and plans to clarify which crypto activities fall inside securities regulation and which do not. Those rulemaking and enforcement efforts affect market infrastructure (custody, exchanges, staking services) and, therefore, the tools available to enforce divorce orders. For example, clearer standards for regulated custodians mean parties may prefer placing crypto with regulated custodians to make future enforcement easier. 

Macro adoption and market trends. Mainstream adoption by institutions, growing consumer interest, and ongoing integration of crypto into corporate treasuries and platform rewards have increased the prevalence of crypto in household portfolios. That broadening adoption means more divorces will involve digital assets in one form or another, and courts are seeing more cases addressing how to treat them. 

Valuation: Best Practices for Courts and Practitioners

Because price volatility is a major issue, valuation needs to be deliberate:

  • Agree upfront on a valuation date and source: Parties commonly use a market close price from a major exchange on a specific UTC date/time, or an average price over several days to smooth volatility. Specify which exchange or data provider is authoritative in your agreement.
  • Document the source wallet and transaction history: Settlement language should identify wallet addresses, exchange accounts, and transaction IDs. This can help reduce ambiguity when transfers occur later.
  • Use qualified experts: If valuation is contested, blockchain forensic specialists and experienced valuation professionals can trace assets, determine acquisition dates and cost basis, and recommend fair valuation methods.
  • Plan for tax consequences: Remember that transfers can create taxable events. A “transfer” to satisfy a divorce award may be treated differently for tax purposes depending on whether it’s part of a divorce settlement or a property transfer incident to divorce, and whether it triggers recognition of gain. 

Tax Consequences: What to Watch For

The IRS treats cryptocurrency as property, meaning capital gains taxes can apply when crypto is sold or otherwise disposed of. Important considerations in divorce:

  • Transfers incident to divorce: Historically, transfers of property between former spouses incident to divorce could be non-taxable events under certain Code provisions, but tax treatment can be nuanced with digital assets. Confirm current IRS guidance and, when possible, structure transfers to avoid unexpected tax consequences.
  • Cost basis tracking: Accurate, wallet-by-wallet cost basis tracking matters, especially after 2025 changes requiring stricter reporting and tracking of digital-asset transactions. If parties agree to divide future proceeds from crypto sales, remember to allocate cost basis and recognition of gains/losses in settlement documents.
  • Staking, forks, and “earn” programs: Income from staking, hard forks, airdrops, or interest-like programs can generate taxable income that should be reported and allocated between spouses where appropriate. Recent IRS rulings have addressed some of these events, but practitioners must stay current. 

Discovery and Forensic Tools: How to Find Hidden Crypto

Crypto and Divorce

If one spouse suspects undisclosed crypto, the following tools and legal strategies can help:

  • Subpoenas and third-party discovery: Request records from exchanges, payment processors, and custodians. Improved reporting requirements and exchanges’ obligations make this route more fruitful than in the early crypto years.
  • Blockchain analytics: Blockchain tracing firms can follow on-chain movements, link addresses to known exchanges, and sometimes identify off-chain relationships. Combined with subpoena power, tracing can reveal conversion to fiat or transfers to third parties.
  • Narrowly drafted interrogatories and asset searches: Ask for detailed statements about wallets, private keys, and related digital assets (NFTs, tokens, DeFi positions).
  • Forensic accountants: They can reconcile on-chain and off-chain activity, identify patterns of concealment, and estimate present-day value at agreed valuation dates. 

Practical Division Options Courts Use

There is no one-size-fits-all. Common approaches include:

  • In-kind division: Transferring specified tokens or NFTs to the receiving spouse’s wallet. This requires cooperation to transfer private keys or use custodial escrow.
  • Buy-out: One spouse keeps the crypto and compensates the other with equivalent value in cash or other assets. This avoids key-transfer headaches but raises valuation and tax questions.
  • Phased transfer: To manage volatility, parties may use a phased schedule (e.g., a portion transferred immediately and the remainder over time) with clauses to rebalance if significant price moves occur.
  • Escrow or court-supervised transfer: Using a neutral custodian or escrow to enforce transfers and verify completion.
  • Alternative equivalent award: Awarding non-crypto assets equal to the crypto’s value, sidestepping custody problems.

Settlement documents should be extremely detailed, include wallet addresses, exact token amounts, transfer windows, verified steps for key transfer, and remedies for noncompliance (e.g., contempt, sanctions, or awarding equivalent value). Recent practice shows courts favor specific, enforceable mechanisms rather than vague promises. 

Enforcement: What if a Spouse Refuses to Transfer?

Enforcement can be complicated, but remedies exist:

  • Contempt and sanctions: If a party refuses to comply with a court order, courts can impose contempt sanctions.
  • Constructive trust or equitable relief: Courts can impose remedies that recognize the claimant’s interest in misappropriated assets.
  • Third-party account freezes: If funds were moved to regulated exchanges, a subpoena or temporary restraining order may freeze accounts.
  • Criminal referral: In extreme cases involving fraud or theft, criminal authorities may get involved, though civil remedies are typically the first line.

The takeaway: protecting rights requires detailed settlements and aggressive discovery when concealment is suspected.

How Recent Economic and Regulatory Shifts Affect Divorce Strategy

  • Better reporting and exchange cooperation: As exchanges come under stricter reporting rules, obtaining records via subpoena is more likely to succeed. That should encourage full disclosure, but also incentivize concealment strategies that require forensic tracing. 
  • Regulatory clarity: If more custodians operate under clear regulatory regimes, parties may prefer placing assets with regulated custodians during divorce to simplify division and enforcement. SEC and federal agency actions in 2025 are moving in this direction.
  • Macro adoption increases prevalence: As institutions and individuals hold more crypto, divorces involving digital assets are more common, meaning courts and counsel are becoming more experienced and precedents are accumulating.

Practical Checklist for Clients

  1. Inventory every digital asset: Coin/token names, wallet addresses, exchange accounts, transaction IDs, date acquired, and cost basis.
  2. Preserve evidence: Don’t delete apps, accounts, messages, or transaction histories; preserve devices and create mirror images if necessary.
  3. Consider immediate protective orders: If you suspect active concealment or dissipation, ask the court for a temporary restraining order or asset preservation order.
  4. Use professionals: Forensic accountants, blockchain analysts, and tax advisors can provide necessary technical support and credibility.
  5. Draft precise settlement language: Include valuation date, data sources, wallet addresses, transfer steps, and remedies for noncompliance.
  6. Factor taxes in settlement allocation: Decide who bears tax consequences for transfers or future gains. 

Why You Need an Experienced Family Law Firm for Crypto Cases

Crypto complicates nearly every stage of a divorce: discovery, valuation, tax planning, negotiation, and enforcement. Without knowledgeable experience, clients risk:

  • Accepting settlements that omit hidden assets.
  • Receiving awards that are impossible or costly to enforce.
  • Facing unexpected tax liabilities from poorly structured transfers.

How Masters Law Group Can Help

Crypto and Divorce

At Masters Law Group, we understand that divorce is challenging enough without the added complexity of dividing digital assets. Our team is well-versed in handling cases that involve cryptocurrency, NFTs, and other digital property. We know how to uncover hidden assets, work with forensic experts to trace transactions, and draft enforceable settlement agreements that help protect your financial future.

Here’s how we can help you:

  • Comprehensive Asset Discovery: We partner with forensic accountants and blockchain analysts to help ensure full disclosure of crypto holdings.
  • Valuation & Division Strategies: Our attorneys will help you determine accurate valuations, select the right valuation dates, and create clear division methods that account for crypto’s volatility.
  • Tax-Aware Settlements: We work closely with tax professionals to help ensure that transfers and allocations are structured in the most tax-efficient way possible.
  • Enforcement & Protection: If your spouse refuses to disclose or transfer digital assets, we’ll pursue court orders, sanctions, or subpoenas to protect your rights.
  • Personalized Guidance: Every divorce is unique. We tailor strategies to fit your specific needs, whether you want to keep crypto holdings, liquidate them, or receive equivalent value in other assets.

When your financial security is on the line, you need a family law firm that not only understands the law but also the fast-evolving world of digital assets. Masters Law Group brings both to the table, giving you peace of mind in an otherwise uncertain time.

Final Thoughts and Next Steps

Digital assets are now a routine part of many marital estates. The intersection of technology, law, and finance means that divorce involving crypto requires thoughtful strategy, technical knowledge, and precise legal drafting. Courts, regulators, and market actors continue to shape the landscape, and Masters Law Group stays current to help protect client interests in this evolving environment. Recent regulatory and reporting changes have made it easier to trace and document holdings, but concealment risks remain. Early disclosure, careful valuation planning, and enforceable settlement mechanics are key.

If you suspect undisclosed crypto in your marriage, are unsure how to value or divide tokens and NFTs, or want a tax-aware settlement that’s enforceable in practice, contact Masters Law Group. We’ll evaluate your situation, explain your options, and coordinate the technical and legal resources needed to secure a fair outcome.

Disclaimer: This blog is for informational purposes only and does not constitute legal advice. If you need legal assistance, please contact the qualified attorneys at Masters Law Group. Our firm can help you handle your family law case in Illinois, including divorce, custody, and mediation services.

How is Cryptocurrency Handled in an Illinois Divorce?

Bitcoin is already making waves in 2025, as cryptocurrency investors watch closely after Donald Trump’s second presidential inauguration on January 20. Trump has issued over 100 executive orders on his first day in office, including measures that impact Bitcoin and the broader digital asset industry. However, the rise-and-rise of Crypto in the U.S. means the rise-and-rise of Crypto in divorce cases.

Cryptocurrency is no longer a niche financial asset—it’s mainstream. In 2024, global cryptocurrency ownership reached over 420 million people, with Bitcoin and Ethereum dominating the market. A flurry of executive orders could come within Trump’s first 100 days, with crypto orders enacted on Day One, Reuters reported in late December.

As digital currencies become more integrated into financial portfolios, their presence in divorce cases has surged. For many couples in Illinois, dividing cryptocurrency presents unique challenges beyond traditional assets. From extreme price volatility to the decentralized nature of digital wallets, handling cryptocurrency in divorce requires careful consideration. 

Below, we explore the most pressing challenges, including valuation, tracking ownership, and navigating tax implications, and how Illinois law addresses these issues. 

What is Cryptocurrency?

Cryptocurrency is a form of digital currency that operates on decentralized blockchain technology. Unlike traditional fiat currencies, central banks do not regulate cryptocurrencies. Although Bitcoin remains the most recognized digital asset, the market has diversified significantly with the emergence of alternatives such as:

  • Litecoin
  • Solana
  • Ethereum
  • Zcash
  • Monero, among others.

These digital currencies have gained traction for their unique features and applications, extending beyond financial transactions into smart contracts, privacy, and decentralized applications. As cryptocurrency becomes more mainstream, its integration into various aspects of life is expected to expand further. Now, let’s explore how cryptocurrency impacts divorces across the United States.

Challenges in Handling Cryptocurrency During Divorce

The rise of cryptocurrency has added unique complexities to divorce proceedings in Illinois. Unlike traditional assets, cryptocurrency presents challenges that require tailored, in-depth experience to address effectively. From valuation to ownership tracking and tax implications, these issues can significantly impact the equitable division of assets. Below, we explore the key challenges divorcing couples face when handling cryptocurrency.

  1. Valuation: In Illinois divorce cases, crypto’s valuation date can be critical. Courts typically use the date of filing or the date of trial to assess the value of marital assets, but the fluctuating nature of cryptocurrency might require additional considerations.
  2. Tracking Ownership: Unlike traditional financial accounts, cryptocurrencies are often stored in digital wallets or blockchain platforms without easily accessible account statements. This decentralized nature can make it challenging to identify and verify holdings.
  3. Tax Implications: Converting cryptocurrency to cash or transferring it to another party may trigger capital gains taxes. Illinois courts may consider these tax consequences when dividing assets to help ensure an equitable distribution.

Understanding Equitable Distribution In Illinois

Under Illinois law, property acquired during the marriage is generally considered marital property subject to equitable distribution. Determining whether crypto is marital or non-marital involves examining when and how it was acquired. As an equitable distribution state, Illinois courts divide marital property fairly and justly rather than strictly equally. This process takes into account several factors, including:

  • Contributions of Each Spouse: Efforts in acquiring, preserving, or increasing the value of the marital property.
  • Length of the Marriage: The duration of the union plays a significant role in how property is divided.
  • Primary Caregiver Status: Consideration of which spouse primarily cared for the child/children.
  • Economic Circumstances: The spouse’s financial standing at the time of division.
  • Prenuptial or Postnuptial Agreements: Any existing agreements that dictate property distribution.
  • Personal Factors: The age, health, occupation, and future needs of each spouse.
  • Other Relevant Factors: Any additional elements the court finds pertinent to achieving a fair outcome.

Understanding how property is classified and divided is essential, especially in cases involving complex assets like cryptocurrency. If you’re having difficulty navigating property division in Illinois, working with an experienced crypto divorce attorney can help provide clarity and guidance tailored to your situation.

Steps to Handle Cryptocurrency in Illinois Divorces

Cryptocurrency has introduced a new level of complexity to divorce cases in Illinois. However, with the right legal representation, couples can effectively navigate these challenges and work toward a fair and equitable resolution. 

  1. Full Financial Disclosure: Illinois law requires both parties to a divorce to provide full financial disclosure, including listing all assets, including cryptocurrencies. If one spouse suspects the other is hiding cryptocurrency assets, they may need to employ a forensic accountant to trace transactions on the blockchain.
  2. Accurate Valuation: Accurate cryptocurrency valuation is essential to ensure fair division. This may involve hiring a professional to assess the value of the digital assets on a specific date. Courts may also consider appointing a neutral financial professional to provide a valuation.
  3. Division of Assets: Once the cryptocurrency’s value is determined, the court will decide how to divide it equitably. This does not necessarily mean a 50/50 split. Illinois courts consider various factors, such as each spouse’s contribution to the marital estate, the duration of the marriage, and each party’s economic circumstances.
  4. Addressing Hidden Assets: Courts may allow for subpoenas of cryptocurrency exchanges or blockchain transactions if there is suspicion of hidden cryptocurrency. Forensic accountants can track transactions and identify digital wallets, helping ensure that all assets are accounted for.

Given the complexities of cryptocurrency in divorce cases, hiring an experienced divorce attorney is crucial. An attorney with knowledge of digital assets can help ensure that your rights are protected and that all assets are accurately accounted for and fairly divided.

Practical Tips for Divorcing Couples

Divorce can be challenging, especially when assets like cryptocurrency are involved. Unlike traditional financial assets, cryptocurrency poses unique challenges due to its digital nature. Below are some practical tips to help ensure a smoother process and equitable outcome.

  1. Gather Documentation: Collect all records of cryptocurrency transactions, including purchase receipts, transfer records, and wallet addresses.
  2. Work with Professionals: Consider hiring financial professionals, such as forensic accountants and a crypto divorce attorney, to help ensure accurate valuation and discovery.
  3. Be Transparent: Illinois courts mandate full financial disclosure, including cryptocurrency holdings. Failing to disclose these assets can result in serious legal repercussions. Partnering with an experienced divorce attorney can help you navigate these complex requirements.
  4. Plan for Taxes: Understand the tax implications of transferring or cashing out cryptocurrency during divorce.

How a Crypto Divorce Attorney Can Help Best Divorce Attorney

Navigating a divorce involving digital assets can be complex, especially in 2025, as cryptocurrencies and other digital holdings continue to grow in prominence. Partnering with a divorce attorney experienced in handling digital assets can help ensure that nothing is overlooked during the asset division process. At Masters Law Group, our experienced attorneys are well-equipped to assist you in the following ways:

  • Professional Guidance: We collaborate with financial professionals to help accurately evaluate the value, ownership, and tax implications of digital assets, providing a fair and comprehensive assessment.
  • Negotiation and Mediation: Our attorneys can facilitate amicable discussions to help couples reach mutually agreeable solutions for dividing digital assets, often avoiding litigation.
  • Court Representation: We advocate for our clients in court, where decisions on digital asset division are made based on applicable laws and regulations.

From the volatile nature of cryptocurrency valuations to the complexities of ownership in online businesses, our divorce attorneys offer the knowledge and support needed to navigate these challenges. Trust Masters Law Group to provide valuable guidance in assessing and dividing digital assets during divorce proceedings.

Final Thoughts

In conclusion, the evolving role of cryptocurrency in divorce proceedings highlights the importance of understanding this emerging asset class. As digital currencies like Bitcoin continue to gain mainstream traction, they bring new challenges—and opportunities—to the division of marital assets. For individuals navigating divorce, having a legal team well-versed in cryptocurrency’s complexities is crucial for ensuring a fair and transparent settlement.

At Masters Law Group, we excel in helping clients address the unique financial aspects of divorce, including cryptocurrency assets. Whether it’s identifying, valuing, or dividing these digital holdings, our experienced team is here to guide you every step of the way. 

If you have questions about dividing cryptocurrency or other financial assets in your divorce, contact our experienced divorce attorneys today to schedule a complimentary consultation.

Cryptocurrency & Divorce FAQs

Can cryptocurrency be hidden during a divorce?

Yes, but doing so is illegal and can result in significant legal penalties. Courts in Illinois have mechanisms, such as forensic accounting, to uncover hidden assets.

How is the value of crypto determined?

The value is typically assessed based on the market price on a specific date, such as the filing date or trial. Due to cryptocurrency’s volatility, courts may require a valuation to help ensure accuracy.

What happens if one spouse refuses to disclose cryptocurrency assets?

If a spouse fails to disclose assets, the court may impose penalties, including awarding a larger share of marital property to the other spouse. Working alongside experienced legal counsel can help enforce disclosure through discovery tools.

Is cryptocurrency considered marital or non-marital property?
Courts will evaluate each case individually. Assets purchased during the marriage are generally considered marital property, while those acquired before the marriage, by gift or inheritance, may be classified as non-marital.

What if the cryptocurrency value changes during the divorce?
Cryptocurrency’s volatility can complicate asset division. Courts may use valuation professionals and strategies like assigning a percentage of the total crypto holdings instead of a fixed dollar amount to account for market fluctuations. Working with a trusted divorce attorney can help you navigate these challenges.

Disclaimer: This blog is for informational purposes only and does not constitute legal advice. Every divorce case is unique, and cryptocurrency handling can vary based on specific circumstances. For personalized legal guidance, consult with the experienced divorce attorneys at Masters Law Group.

Splitting Digital Assets in Divorce

In an age where our lives are increasingly intertwined with technology, the division of assets during a divorce has taken on a new dimension. As we enter 2024, “digital assets” have become a significant consideration in divorce proceedings. 

These assets encompass various digital properties, from cryptocurrencies to digital media collections and online businesses. In this blog, we’ll explore the complexities and challenges of splitting digital assets in divorce for 2024. Here’s what you need to know.

Defining Digital Assets

In divorce proceedings, the concept of digital assets has introduced a new layer of complexity. As couples navigate the intricacies of separating their lives, digital assets have become a significant factor to consider. Digital assets encompass any property or wealth existing solely in the digital realm. Here are a few key areas to consider:

  • Cryptocurrencies: In light of the surging popularity of cryptocurrencies like Bitcoin and Ethereum, divorcing couples may encounter the challenge of dividing their digital currency holdings.
  • Online Businesses: Couples who have established or invested in online businesses, such as e-commerce platforms or software startups, must grapple with dividing their digital business assets.
  • Social Media and Online Accounts: Contentious issues may arise regarding access and control over social media accounts, email accounts, and other online profiles.

Understanding the specific complexities of each category is essential. Addressing these digital assets is crucial to achieving fair and equitable divorce settlements in the digital age.

Challenges in Splitting Digital Assets

During the process of a pending divorce, it’s crucial for both you and your spouse to take inventory of all your digital assets, much like you would with physical ones. Each party should compile a comprehensive list of everything categorized as marital property. Here are a few things to consider: 

  • Valuation: Determining the value of digital assets can be challenging, as their worth is often subjective and volatile. Cryptocurrency values, for instance, can fluctuate significantly.
  • Ownership: Establishing ownership of digital assets can be complex. Cryptocurrencies might be held in hidden wallets, and online businesses may have multiple stakeholders.
  • Privacy and Security: Access to digital assets often requires sensitive information, such as private keys for cryptocurrency wallets or login credentials for online accounts. Sharing this information can pose privacy and security risks.
  • Tax Implications: Transferring digital assets between spouses may have tax consequences, depending on the jurisdiction and the nature of the assets involved.

Digital asset division laws and regulations can vary significantly from state to state. This can add complexity to the divorce process. Working with an experienced divorce attorney can help you understand the digital asset division.

Understanding Asset Division in Illinois

If you suspect that your spouse may be concealing cryptocurrency assets, there are steps you can take to investigate the matter thoroughly. In divorce proceedings, fully and honestly disclosing all assets, including cryptocurrencies, is crucial. In Illinois, dividing cryptocurrency assets follows a process similar to any other marital property.

Illinois does not adhere to the community property principle. Instead, the court will equitably distribute assets purchased, converted, or appraised during the marriage. It is important to understand that equitable does not necessarily mean equal; various factors are taken into account in determining the distribution, including:

  • Age, health, and financial circumstances of each spouse.
  • Contributions made to the marital estate.
  • Obligations related to previous marriages, as ordered by the court.
  • Considerations regarding child custody.
  • Pre and post-nuptial agreements.
  • Tax implications.
  • Duration of the marriage.
  • Alimony arrangements.

If you ever find yourself uncertain about the ownership of assets, seeking legal counsel is recommended to help ensure everything is clear.

Working With a Divorce Attorney

Working with a divorce attorney experienced in splitting digital assets can be a game-changer for individuals going through a divorce in 2024. Divorce attorneys understand the complexities of digital assets so that nothing is left to chance during asset division proceedings.  

At Masters Law Group, our experienced attorneys can help you with the following: 

  • Professional Assistance: Consult with financial experts and lawyers experienced in dealing with digital assets. They can help assess these assets’ value, ownership, and tax implications.
  • Negotiation and Mediation: Amicable negotiations can help couples reach mutually agreeable solutions for dividing digital assets without litigation.
  • Court Intervention: In cases where spouses cannot agree on the division of digital assets, a court may step in and decide based on applicable laws and regulations.

From cryptocurrencies’ volatile valuations to online businesses’ intricate web of ownership rights, our divorce attorneys can provide valuable guidance in assessing digital holdings’ value, ownership, and tax implications.

Final Thoughts

As we navigate the digital age, the division of digital assets has emerged as a crucial aspect of divorce proceedings. For couples facing separation in 2024, it’s essential to recognize the challenges and complexities associated with splitting digital assets. 

Let Masters Law Group provide transparency so you can work towards a fair and equitable distribution of your digital assets. Our skilled attorneys, serving communities across Chicago and the suburbs of Elmhurst, Hinsdale, DuPage, and Oakbrook, offer experience and insights into digital assets and divorce, helping you navigate this complex process.

Contact us today to set up your complimentary consultation.

How is Cryptocurrency Divided in Divorce?

Cryptocurrency is an asset like any other kind of asset, and as a result, it may be considered separate property or marital property. What many people do not understand is exactly how complicated this can become. 

Cryptocurrency is a type of code or software that dictates how a unit of currency is produced and regulated.  Essentially, the creator of the cryptocurrency makes the units using an algorithm that relies on cryptography to secure the currency. The most common cryptocurrency, and the first of its kind, is Bitcoin, but there are thousands of other types that can be purchased or earned.

Despite Bitcoin and Crypto prices being extremely volatile, (the recent Crypto crash being a prime example), cryptocurrency is gaining in popularity and becoming a more and more common asset seen in divorce cases.

Crypto and Divorce Trend

Cryptocurrency has gone from an obscure hobby to a significant investment for many people across the country. As crypto assets like bitcoin rose dramatically in price, many investors became wealthy, especially those who entered the crypto market in the early days. However, cryptocurrency can also add new complications to a divorce, particularly when it comes to dividing assets between divorcing spouses.

Here’s a look at some commonly asked questions about cryptocurrency assets in a divorce.

Q: What is Cryptocurrency and is it Considered Marital Property?

A: Bitcoin is a cryptocurrency that allows secure transactions on the internet without having to go through a bank. Bitcoins can be exchanged or traded for other currency, products, or services and have increased in use since their creation in 2008. With this increase comes new challenges in a divorce when it comes to dividing up assets.

Cryptocurrency is considered an asset and as a result, it may be considered separate property or marital property. In some cases, growth in the value of cryptocurrency during the marriage may be considered a marital asset, even if the original purchase took place before the marriage. 

This is especially true when both spouses were involved in using cryptocurrency, investing in crypto assets, or planning to rely on crypto to fund future financial ventures. If you’re a crypto investor considering divorce, you should always consult with your lawyer about how you can expect your investments to be affected by the separation.

Q: Can You Lose Bitcoin in a Divorce?

A: Bitcoins are treated the same as any other asset in a divorce. If the bitcoin transaction was before the marriage, was given as a gift or through an inheritance, it is not marital property and cannot be divided. Therefore, if the transaction was during the marriage, it is marital property and can be divided.

When bitcoins are considered marital property, the easiest way to divide them is to split the determined value 50/50. Since most bitcoins can be cashed out in full, splitting the value 50/50 means each spouse would simply get half.

Another way to divide bitcoins is by negotiating other marital property in exchange. This means, if the spouse with the bitcoins wants to keep them, they can give up other marital property with the same determined value to the other spouse.

Q: Can Cryptocurrency Be Used to Hide Assets During Divorce?

A: A misinformation gap can easily arise especially when only one partner is involved in the crypto market and the other spouse has little knowledge on the aspects of crypto investments. This gap can lead to one partner not knowing what to look for when it comes to uncovering crypto holdings in the asset division process. 

The growing awareness of cryptocurrency technology has led to more divorce attorneys thinking about how to deal with crypto as a way of hiding assets. In some cases, a spouse may suspect the other party has undisclosed crypto holdings, while in other cases, they may notice that the other spouse suddenly seems to have a source of funds that is not tied to their existing employment or investments.

There are several ways that cryptocurrency assets may be discovered. The best-known and easiest to uncover are bitcoin and ethereum. Other cryptocurrencies may offer higher levels of anonymity. Those assets are much less valuable and more volatile than the better-known digital currencies. A forensic expert typically brought in by the parties, may search for cryptocurrency tickers, login credentials for exchanges, or keys for certain types of digital wallets.

Bank statements, credit card statements, and other financial documents may indicate transactions for crypto purchases from various exchanges.

Final Thoughts

During a marriage, it’s important for both partners to have an understanding of their marital income, and investments. With greater knowledge about finances shared between spouses, it can be far more difficult for one person to hide assets during a divorce. 

If you are concerned about how your or your spouse’s cryptocurrency assets could affect your divorce or the asset division process, Masters Law Group can help. Our team of highly trained and experienced family law attorneys are here to answer your questions about divorce and digital asset division.

Contact us today for more information, or to schedule a consultation.