Ah, the good ole’ ball and blockchain! Calling it quits on a marriage is never easy and often expensive. They say divorce costs so much because it’s worth it, and one British couple with cryptocurrency is about to find out exactly why that is as their divorce plays out in the courts.
Britain has now gripped the world with headlines about the world’s first cryptocurrency uncoupling.
It was only a matter of time until a high profile divorce with a high value cryptocurrency was going to dominate bitcoin news. “Crypto cash divorce nightmare looming” titles a cheery, Valentine’s Day press release published by law firm Royds Withy King. The sardonically timed announcement 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 the first of a wave of cases the firm is expecting.
The three separate cases all involve husbands that have invested in, or have purchased cryptocurrencies, including Bitcoin, Litecoin, Ripple and Ethereum.”
The highest value of cryptocurrency in these cases involves “an original investment of £80,000 in November 2016, which was valued at £1m in December 2017 and is now worth £600,000 [$840,000]”. Wow. Guess that’s why divorce during a bullish economy is usually discouraged by legal sharks.
A partner with Royds Withy King describes “a traceability nightmare” in cases where a spouse hasn’t disclosed their assets.
As previously documented 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 cryptocurrency come the divorce. Patriarchal oppressors put it all in monero and deny everything.” While this deception benefits one party, it is unscrupulous and often extralegal.
Sure, the schadenfreude one can derive reading these tabloid worthy cryptocurrency articles feels great, but there are serious issues at stake that ripple out into society at large.
For a little legal background, most countries recognize a 50% division of assets in a divorce, even if one partner was the main breadwinner. It is assumed the other partner’s household contributions such as childcare make this a balanced division. It also takes into account how one can be accustomed to a standard of living and also how it may impact any children to see parents live disparately.
Some lawyers, usually defending male clients, will argue that successful investing in cryptocurrency calls for shrewdness that makes this asset unlike those obtained through a job. For example, the husband embroiled in the $840k likely made his money simply from buying early and hoarding the cryptocurrency. A legal shark is going to argue how that makes his ex-wife unjustified in her pursuit of that coin.
Even if the less-earning spouse does seek an equal division of cryptocurrency, the breadwinner usually begrudges parting with a portion of their portfolio.
While romantic love and cryptocurrency values can ebb and flow, love of money is usually proven to be rock solid. Vandana Chitroda, a partner at Royds Withy King, describes the issue of volatility as “present[ing] 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.” As stated before, divorce is best in bearish economies where there’s less value to lose.
How this new string of divorces may shape both cryptocurrency news, as well as how we think of division of marital assets should be interesting to watch unfold. Will governments eventually be forced to create regulation related to cryptocurrency valuation in such cases, or will the precedent set by division of more traditional assets win out?
(For more personal stories about cryptocurrency, read How a clever trader outsmarted Bitcoin robbers.)