Digital Assets in Divorce: Locating, Identifying, and Valuing Cryptocurrency and Nonfungible Tokens

Description

Family law practitioners must understand digital assets, such as NFTs and cryptocurrency, due to their novelty and the difficulty of discovering, assessing, and litigating over them. These assets are increasingly common, ever-more complex, immensely profitable, not heavily regulated, and easy to hide (monero, dash, zcash, PIVX, verge, horizon, and grin). Even if disclosed, digital currency is often underreported. Failure to recover or preserve these assets during divorce and property division could result in grave harm to the client.

In today's divorce proceedings, counsel should formally request documentation concerning cryptocurrency, NFTs, and any other similar currency. It may take a forensic accountant to uncover these items if a spouse refuses to disclose them. Failure to do so may deprive the non-cryptocurrency-owning spouse of a significant financial asset.

Proper disclosure of cryptocurrency or NFTs does not end the special issues related to these assets. They must be valued. But, they are highly speculative and subject to wild swings in value. It may even be possible to manipulate the apparent value of these assets. Such fluctuations add substantial complexity to the proceedings.

Listen as our panel provides guidance to family law practitioners on handling cryptocurrency assets in a divorce. The panel will discuss navigating the unique issues of locating and valuing digital assets and best practices for managing this marital asset.