Like stocks and real estate, the courts in Florida legally view Bitcoin, Ethereum and other crypto as property subject to equitable division. The issue lies with the volatility and intangibility of these assets. Despite these issues, judges still find a way to split crypto assets fairly.
Ways of valuing cryptocurrency for divorce
All crypto that spouses bought and earned during the marriage counts as marital property, meaning the courts will consider them for division. But before a judge can decide how to distribute this between parties, they must determine the asset’s valuation date. They have discretion in selecting whether an appraisal occurs at the time of filing or at the final trial.
After obtaining the fair market value, the courts or spouses may split their crypto using these methods:
- In-kind distribution: The courts divide the digital currency, allocating a specific amount to each spouse.
- Buyout: The courts decide to award full ownership of crypto to one spouse while compensating the other with an equivalent value in other marital assets.
- Liquidation: The courts sell the crypto and divide the cash proceeds between spouses.
Even though the state has solutions for dividing volatile crypto assets, some would take advantage of their decentralized nature.
Risks of hidden crypto you should know
Because cryptocurrency allows for pseudonymity, some spouses attempt to conceal wealth by transferring funds into private digital wallets or obscure altcoins. Even so, digital forensics can still trace and uncover hidden assets, as all transactions on the blockchain are permanent. Intentionally hiding crypto constitutes fraud, and Florida judges will impose severe penalties on spouses caught concealing marital wealth.
What to do with your crypto holdings during divorce
Florida law mandates that you provide a full disclosure of your assets, including crypto. When drafting your disclosure, ensure you include everything you own digitally. An experienced divorce attorney can provide guidance on navigating a divorce that involves cryptocurrencies.