When Bitcoin hit the scene in 2009, few Oregon residents understood how big of a deal cryptocurrencies were going to be. It is likely that none realized the impact cryptocurrencies would have in future divorce settlements. Currently, a number of family law attorneys as well as divorcing individuals are finding it challenging to find, place a value on and fairly divide cryptocurrencies.
One of the biggest problems that family law firms are facing with cryptocurrencies is that many of them just do not understand what they are. As a result, dealing with cryptocurrency assets has made the divorce process lengthy, difficult and more expensive. Two of the primary reasons for this are how difficult it is to value cryptocurrencies as an asset and how easy it is to hide cryptocurrencies.
Many people refer to cryptocurrencies as the new offshore account. Cryptocurrencies have made it possible for individuals to invest a relatively small amount of money and turn that into a considerable amount of wealth. The very nature of cryptocurrencies means that one party can easily hide the asset, making tracing cryptocurrencies a time-consuming nightmare. This does not mean that the process is impossible: If a person purchases cryptocurrencies online, there may be a way to trace it. However, when cryptocurrencies are purchased directly and then transferred offline, tracing them becomes all but impossible.
Determining the value of cryptocurrencies is challenging because they fluctuate based on the market. At the start of the divorce, a cryptocurrency may have a set value. By the middle of the divorce, that value may have risen or dropped dramatically. By the time the divorcing couple is distributing assets, the price may have swung in a completely different direction.
A family law attorney may be able to advise their client on financial issues connected to their divorce. This includes things like what to do with shared accounts, how to put a value on assets and other practical financial issues that could arise during the divorce proceedings.