British Couple Lawyer Up as $840k Cryptocurrency Divorce Heats Up
Divorce is never fun and rarely simple, but when one party – generally the male – owns cryptocurrency, there’s an added layer of complexity. With cryptocurrency still relatively new as an asset class, there have been very few cases to date in which the unhappy couple have squabbled over altcoins. A British law firm professes to be handling three such cases at present, with the largest involving a tug-of-war over crypto valued at $840,000.
Kissing Goodbye to the Ball and Blockchain
It was only a matter of time until a high profile, high value crypto divorce grabbed the headlines. In the event, it was Britain that claimed the dubious honor of hosting the world’s largest cryptocurrency untethering to date. “Crypto cash divorce nightmare looming” reads the cheery press release published by UK law firm Royds Withy King, on Valentine’s Day no less. Bolstering the stereotype about opportunistic lawyers, it reads:
Royds Withy King is acting on three separate high value divorce cases where spouses are seeking the disclosure and a potential share of cryptocurrency assets. These are a first wave of cases that the firm is expecting. The three cases all involve husbands that have invested in or have purchased cryptocurrencies, including Bitcoin, Litecoin, Ripple and Ethereum.
The most lucrative of these cases – for all parties – concerns “an original investment of £80,000 [of cryptocurrency] in November 2016, which was valued at £1m in December 2017 and is now worth £600,000 [$840,000]”.
One of the firm’s partners speaks of there being “a traceability nightmare” in cases where a spouse hasn’t disclosed their assets. One partner’s nightmare, of course, may be another’s dream. As previously ventured on news.Bitcoin.com, “Parting with half of one’s cryptocurrency collection doesn’t come easy…Progressive males let their wife keep her surname and give up half their crypto come the divorce. Patriarchal oppressors put it all in monero and deny everything.”
While onlookers who aren’t embroiled in a crypto divorce may derive a degree of schadenfreude from such cases, there are serious issues at stake. In many countries, a 50% division of assets is awarded, despite the husband often being the main breadwinner, because the wife’s contribution is recognized in other domains, including caring for their children and supporting his career. Making money from cryptocurrency calls for shrewdness, foresight, and iron hands, but qualifying it in the same bracket as a 40-hour-per-week job may be stretching it. Unless the husband embroiled in the $840k case is a full-time crypto trader, he likely made his money simply from buying early and hodling.
Always 50/50 In Relationships?
Even if the man’s spouse isn’t seeking an equal division of cryptocurrency, he may, for various reasons, begrudge parting with a portion of his portfolio. As Vandana Chitroda, a partner at Royds Withy King, points out: “[Volatility] presents a real challenge when valuing cryptocurrencies. Valuations will have to be carried out a number of times during the divorce process as the case progresses.”
If the couple are to reach an amicable resolution, the wife may find her husband more willing to come to an agreement in a bear market than during a bull run. Whether she’d be willing to accept a payoff while the crypto markets are mired in the red is another matter entirely. In the years to come, divorce courts may be prove to be a prime testing ground for determining how cryptocurrencies are classified and valued.
Do you think crypto assets should be equally apportioned in the event of a divorce? Let us know in the comments section below.
Images courtesy of Shutterstock, and Royds Withy King.
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