How Cryptocurrency Impacts Your Divorce

How Might Cryptocurrency Impact Your Divorce? 

Most of us are aware of the increasing popularity of cryptocurrencies, such as Bitcoin. Although these currencies began to be purchased primarily with tech investors, they have become more mainstream over the past few years. There are now thousands of different types of these currencies to choose from. And each type of cryptocurrency can vary tremendously in terms of stability and value. 

Many investors and attorneys have only a cursory understanding of how these currencies function. This can make tracking the worth of investments challenging as there are many questions about how they are valued or how a couple should divide them during a divorce. It is possible for the skilled investor to hide assets through cryptocurrency when going through a marital dissolution. 

To that end, individuals considering a divorce, in which cryptocurrency investments are suspected, should have caution about selecting a family law attorney. Be certain to choose one who is savvy about how cryptocurrency works when dividing assets. California is a no-fault divorce state, meaning all assets are split between the divorcing parties. Carefully finding a lawyer who not only has demonstrated expertise with these currencies, but also has deep relationships with financial advisors who specialize in this area, is critical. This is a complex issue and it needs to be unwound with great knowledge and care. 

Why has Cryptocurrency Become so Popular?

Presently, cryptocurrencies are not tied to any government or third-party bank or brokerage. And they can be shifted anywhere around the globe without interference, fees or regulations. These transactions are kept in a database known as “blockchain.” Interestingly enough, the public can view blockchain only needing internet access to do so. 

The Problems Cryptocurrency Can Cause During a Divorce

Viewers need a private key to trace the blockchain to a specific owner. This key is each individual’s password – this is what allows individuals to trade or spend units on blockchain. If this key is lost it is literally impossible to access the funds. Determining the value of cryptocurrency requires access to that private key. 

Unlike other financial investments, there is no bank or financial institution which holds cryptocurrency. Some individuals have tried to subpoena the private key information. But savvy investors with these accounts can simply transfer the private key to a place not easily tracked. 

If the private key is located it is easy to track all of the blockchain transactions. But if the private key is undiscoverable, it is extremely difficult to trace. However, most bitcoin transactions are completed on smart phones, tablets or computers. A good forensic expert who specializes in cryptocurrency can usually pull data related to cryptocurrency from these devices. Always check with your attorney before going to this step to stay safe from possible wiretapping charges.


With the increasing popularity of cryptocurrency investments, this issue looks to become a much larger problem as investors continue to move forward in this area. Before divorce proceedings are started, it is best to meet with a highly skilled family law attorney who can help uncover how to locate and value these types of investments.

Posted in Divorce finances, High Asset Divorce.