Seems that the “sweet Valentine” wasn’t sweet for just everybody. The wealthy Oxfordshire couple decided to divorce. Oh well, some will say. It happens. If there isn’t a prenup, you divide the wealth 50:50. Easy as that. Or is it? What if now, the wealth isn’t composed only from stocks and bonds, wine cellars, luxury real estates or yacht? What if there were cryptos involved?
Well, exactly Bitcoin, Litecoin, Ripple and Ethereum are now at the centre of three high value divorce cases for law firm Royds Withy King and the number is expected to grow as digital assets become more mainstream.
One of the firm’s cases involves an original investment of £80,000 of cryptocurrency made in November 2016, which was valued at £1m in December 2017 and is now worth £600,000 ($840,000).
The problem here is obvious. The court now has to make orders over cryptocurrencies and it still isn’t quite clear what power it has, because it’s still not really defined what kind of property cryptos actually are. There are possibilities of splitting the assets or one party to pay an equivalent to another.
“These are the first cases we have seen, and we expect to see many more. There will also be those divorces where a spouse may not have disclosed such assets leaving a traceability nightmare,” said partner in the firm, Vandana Chitroda. She also points out that 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,” she said.
Chitroda added that they believe that cryptocurrencies will be a significant feature in a large number of divorces. “Whilst cryptocurrencies are volatile, they are not going to go away. It is important that if you believe your husband or wife has invested in or purchased cryptocurrencies, such as Bitcoin, and you are separating, you tell your legal adviser.”
Deborah Jeff, head of family at Seddons said that the problem is that value can change so dramatically and it’s usually advisable to share the value equally between the parties.