Cryptocurrency or Digital Currency accumulated during a marriage or common law relationship is considered Family Property in British Columbia, and is generally divided 50/50 between spouses unless extraordinary circumstances dictate a different division. Valuing and tracking cryptocurrency can be difficult due to its volatile nature, and spouses may attempt to hide it. Courts in British Columbia have found cryptocurrency to be family property, including Bitcoin and Ethereum. If one spouse has accumulated cryptocurrency during the marriage, the other spouse has the right to make a claim against it and obtain 50% of its value, even if it is hidden.
Signs that a spouse may be hiding digital assets include being tech-savvy, large transactions to unknown sources, significant earnings with few savings, and accounts with various cryptocurrency exchange platforms.
Methods used to locate cryptocurrency include verifying tax returns, examinations for discovery, requesting public keys, obtaining disclosure orders for financial institutions and crypto exchanges, and analyzing bank/credit card statements.
Valuing cryptocurrency at the time of divorce can be challenging due to its volatile nature. If one spouse has recklessly invested in cryptocurrency, a family lawyer specializing in cryptocurrency can provide guidance on how to recover losses.
Cryptocurrency can be divided by transferring a portion of it to the former spouse’s crypto wallet or transferring an equivalent amount in cash. Capital gains from the sale of cryptocurrency may be payable and are subject to tax, which should be shared 50/50 between spouses.
Given the difficulties with cryptocurrency and how it is stored, individuals are encouraged to seek legal advice from experienced lawyers specializing in crypto division to better understand how to navigate the complexities involved in cryptocurrency division during a divorce. To set up a consultation, individuals can call at 604-974-9529 or get in touch.