Can My Spouse Take My Crypto in a Divorce?
If you have crypto, you may be worried about what will happen to this digital asset in the event of a divorce. Continuing, we will discuss how crypto might be divided as well as other ways in which this currency can impact your divorce.
What Is Cryptocurrency?
Cryptocurrency (i.e. crypto) refers to virtual or digital money that is secured by cryptography and takes the form of coins. While most crypto remains intangible, some types of crypto are linked to credit cards and other physical projects. Cryptocurrency was created with the intent of streamlining existing financial architecture by making it faster and cheaper to exchange finances and goods (by removing the need for intermediaries like banks).
There are many types of cryptocurrency—the most popular of which is bitcoin. Other types of crypto include:
- Dogecoin (DOGE)
- Ethereum (ETH)
- Tether (USDT)
- USD Coin (USDC)
- Binance Coin (BNB)
- Binance USD (BUSD)
- Cardano (ADA)
- Solana (SOL)
- Polkadot (DOT)
What Happens to Digital Assets (Including Crypto) in a Florida Divorce?
Crypto is considered an asset in your divorce. Thus, what happens to this digital asset is dependent on whether it is classified as a separate or marital asset. If you obtained a digital asset prior to your marriage, it will be separate property and, in most cases, is not subject to division.
However, growth in the value of the cryptocurrency or asset during your marriage may be considered marital property. The increase in value is usually subject to division in cases where both spouses:
- were involved in the use of the crypto,
- invested in the crypto (financially, with their time or skills, etc.), or
- rely on the crypto to fund a joint asset or their financial health.
Unless you and your spouse work out the property division terms yourself, your cryptocurrency will be divided by the court. While the court’s initial aim is to divide assets equally, either party may receive more or fewer assets if a justification can be made for an unequal distribution, including but not limited to:
- Wasteful dissipation of assets
- Each party’s economic situation and separate assets
- Each party’s contribution to the marriage (including childcare services, services as homemakers, etc.)
- The desirability of retaining certain assets intact and free from any claim or interference from the other party
- The length of the marriage
- Any other relevant factors
Cryptocurrency may be divided in one of the following ways.
- Liquidation. One spouse can liquidate the other party’s share of the cryptocurrency into cash and give the non-owner spouse their share. Liquidation usually occurs in cases where one party wants to keep the crypto while the other would like cash.
- Equal division. If both parties want the cryptocurrency, the court or couple may decide to equally divide the crypto and award both parties a portion of the digital asset.
- Awarded to either party. The spouse who did not make the initial purchase of the cryptocurrency may allow the purchaser to maintain ownership of the asset in exchange for another asset; this exchange is an option for couples who work out the terms of the divorce, including asset division, themselves. If left to the court, either party may be given ownership of the crypto.
Get Legal Help
At Dale L. Bernstein, Chartered Law Office, our attorney has over three decades of legal experience, and we are committed to helping clients protect their assets and financial future during their divorce. If you or your spouse have cryptocurrency or other digital assets, we can advise you of your legal rights and options as well as help you achieve a favorable outcome with your property division agreement and divorce. Known for our dedication to excellence and for being extremely knowledgeable and qualified, you can trust our firm to help you navigate the case legalities.
Learn more about how our firm can help you by calling (727) 312-1112 or reaching out online today.