Separations are generally complex, not to mention messy, but the emergence of cryptocurrencies has thrown a new spanner into the works, according to Parke Lawyers.
Virtual currencies such as Bitcoin and Ethereum, not to mention the entire phenomenon of blockchain technology, are difficult for many to understand. As they become popular, the need for lawyers to fully understand how they work is rapidly increasing.
This is particularly the case in separation and divorce as couples divide their assets.
Parke Lawyers Managing Director Jim Parke said the increasing popularity of cryptocurrencies meant that more separations involved Bitcoin and other derivations.
“Due to the virtual nature of these transactions, most of which are pseudonymous, they are hard to trace and difficult to value.
“The absence of physical currency and the use of online trading methods may make cryptocurrencies a tempting safe-haven for an unscrupulous spouse wishing to hide assets from their partner. Holding cryptocurrencies in a digital ‘wallet’ identified by a pseudonymised private address makes them difficult to trace. That said, the volatile and unregulated value assigned to cryptocurrencies may make this a high risk and potentially wasteful strategy.”
Cryptocurrencies are relatively new, with Bitcoin created in 2009, and lawyers are now beginning to see the first instances of separations involving virtual currency.
Mr Parke said the splitting of assets during divorce proceedings was much more complex when cryptocurrencies were involved.
“If one partner decides not to disclose their cryptocurrency holdings, the divorce process can be much more time-consuming and expensive.
“Virtual currencies traded using an online exchange or acquired with funds from a bank account can be traced and valued but the