Cryptocurrencies pose great difficulties in divorce proceedings
The almost anonymous nature of the transactions, as well as the constant fluctuation of prices, cause problems never before seen, especially when it comes to the distribution of digital assets acquired during the marriage.
A law firm based in the United Kingdom made public some problems that have arisen in relation to the possession of digital assets such as Bitcoin within the divorce proceedings.
The law firm Royds Withy King said that they have brought in their offices a series of cases in which there were disputes over the possession of balances in cryptocurrencies. In one of these cases the conflict was for amounts estimated at USD $ 1.4 million.
The firm said they were currently working on three divorce cases, in which the people involved were asking their partners to report the amount of assets they owned and a possible portion of them as part of the separation of assets.
Vandana Chitroda, partner attached to Royds Withy King, published in a blog on the occasion of Valentine's Day the following:
These are the first cases we have seen, and we expect to see many more ... There will also be divorces where a spouse may not have informed his or her partner about such assets, creating a complete nightmare in terms of traceability. "
In the three cases reviewed by the law firm, the spouses had invested in the purchase of cryptocurrencies, which included Bitcoin, Litecoin, Ripple and Ethereum.
The growing number of investors and the increase in the price of cryptocurrencies have led people to become increasingly aware of the value of these assets, which has created new problems when couple separations occur.
To the aforementioned problems by the lawyers responsible for these cases, there is also the lack of guidance from the courts, which do not have specific answers due to lack of legal guidelines in these cases.
According to the law firm, a case that is currently being handled has been made especially complicated by the fluctuation in the value of digital currencies, since by November of 2016 divorce applicants invested 80,000 pounds sterling (more than USD) $ 112,000) in the purchase of digital assets, a figure that was multiplied to be quoted in UK £ 1,000,000 (USD $ 1,4 million) by the end of 2017, currently quoting in UK £ 600,000 (more than USD $ 840,000).
In this regard, Chitroda wrote:
This presents a real challenge when assessing the cost of cryptocurrencies. Valuations would have to be carried out several times during the divorce process as the case progresses. "
The other problem associated with cryptocurrencies in these cases is associated with their nature, since they are normally negotiated anonymously in decentralized networks, often without the need for a bank account, which makes it difficult to discover the nature of the investment made, or if any of the members own the respective assets.
In this regard, Mark Philips, another partner of Royds Withy King, commented:
Tracking cryptocurrencies can be a long and expensive process. When the digital currency is bought directly and is taken from online platforms, it is almost impossible to trace. "