What Happens To My Cryptocurrency In A Maryland Divorce?

Cryptocurrency such as Bitcoin or Ethereum is considered an asset in Maryland. In a Maryland divorce, all assets are subject to equitable distribution. This includes cryptocurrencies. The one major difference between cryptocurrency and a tangible asset is that cryptocurrency is easier to hide.

In Maryland, we have a law known as the Marital Property Act. The statute says that all marital property is subject to equitable distribution. Equitable distribution means that assets are divided in a manner that the court deems fair based upon specific considerations. It does not mean that assets are necessarily divided evenly. The court may find cause to favor one spouse with more assets from the marital estate than the other. There are several reasons why the court may elect to do this. For example, if one spouse has considerably more earning power than the other spouse, the court may see fit to divide assets unevenly.

When it comes to cryptocurrency, there are two main challenges. The first is finding it. The second is valuing it. Valuing crypto is inherently complex because the value of individual coins tends to be much more volatile than other assets. Bitcoin, for instance, has a notoriously variable value and can change value within the span of months. This shifting in value can make pinpointing an accurate measure of crypto particularly difficult.

You can avoid a lot of these challenges by working out an agreement with your spouse. If your spouse has 10 Bitcoins at a current value of $900,000, and you can agree that each spouse will receive five Bitcoins, then that could eliminate the need to value the Bitcoin. This can save you money because assets generally need to be appraised and appraisals cost money.

Dealing with hidden assets 

We’ve touched on one of the complexities involving crypto. Now let’s untangle the other. If your spouse invested in crypto without your knowledge, it can sometimes be difficult to uncover the assets. Cryptocurrencies aren’t stored in a bank. They can be stored quite discreetly on a USB stick or thumb drive. In addition, crypto purchases and trades are not documented to the same extent as banking transactions. This makes it significantly easier to sell your crypto without leaving a paper trail. Stocks, bonds, and other investments would leave a paper trail. This makes them significantly easier to track.

If you suspect that your spouse is hiding crypto assets, then you may want to involve a forensic accountant in the divorce process. These are specialized experts who are used to dealing with crypto and other assets. Blockchain experts, for example, can do in-depth investigations across multiple platforms to see if your spouse has hidden any assets from you. If your spouse tries to give away the crypto to prevent it from being equitably distributed, this would constitute the dissipation of marital assets. That may entitle you to a larger chunk of the marital estate or a larger monetary award.

Talk to a Maryland Divorce Lawyer Today 

Schlaich & Thompson, Chartered represent the interests of Maryland couples pursuing a divorce. Call our Bel Air family lawyers today to schedule an appointment, and we can begin addressing your concerns right away.