As use of digital currency becomes more widespread, it is an increasingly common factor that can complicate Texas divorce cases.
Digital currency, otherwise known as cryptocurrency, operates much like traditional money. As an online medium of exchange, it allows you to make investments in various companies as well as to buy and sell certain items. There is much debate over cryptocurrency, with some heralding it as the wave of the future while others insist it has little future and minimal actual value. Whatever your own opinion or experience with it is, there is no denying the impact it can have when filing for divorce in Texas.
Hidden Assets: The Problem with Locating Cryptocurrency
One of the biggest issues with cryptocurrency in divorce is that it can be difficult to locate. Under the Texas Family Code, any property earned, acquired, or otherwise accumulated during your marriage is assumed to belong to both parties and must be divided between them in any eventual divorce settlement or order issues. Hidden assets are a potential issue in any divorce case and is more likely to occur when digital currency is involved.
Bitcoin is the most well-known and recognized type of digital currency, but it is only one of hundreds out there. It is called cryptocurrency due to the encryption process used to send or receive money. Similar to tokens or power chips, it represents actual dollar amounts but can be notoriously hard to track.
Instead of these funds being held in actual banks, they exist online. Locating them often requires technical skills. In some cases, you may be able to track purchases of Bitcoin or other cryptocurrencies through bank transfers and a trace of the users online activity. However, people with advanced computer skills are often able to erase these or other digital footprints they leave behind.
Valuing Cryptocurrency in Your Divorce Case
Even once you do locate Bitcoin or other types of digital currency your spouse may possess, valuing it can create additional problems. Bitcoin and other cryptocurrencies are not subject to regulation nor are they issued by banks. Investopedia states that the primary value of digital currency results from supply and demand, as well as the number of other cryptocurrencies available.
Bitcoin gained popularity in 2017 and saw a tremendous increase in its worth. However, this does tend to fluctuate and is something that must be factored in if digital currency is included among the assets in your divorce case. Digital currency users have limited options for selling or unloading shares, which means most are likely to hang onto them rather than cashing out. You want to be sure that any values given to cryptocurrency in your divorce take into account these fluctuations.
Contact Our Texas Divorce Attorneys
At Scott M. Brown & Associates, we provide the aggressive legal representation needed in divorce cases, to ensure you get the maximum amount you are entitled to in any final settlement or order issued. To discuss your case and how we can help, contact our League City divorce attorneys to request a consultation today.
