Cordell & Cordell Litigation Partner Kelly Burris recently wrote a pair of articles for Divorce Magazine and Family Lawyer Magazine covering the important need-to-knows concerning cryptocurrency and divorce.
Cryptocurrency has skyrocketed in popularity in recent years, and it is sure to become more common as a martial asset that will need to be valued and divided during the divorce process. However, this process is a lot more complicated than the methods used for dividing more traditional assets.
That is because cryptocurrency transactions are stored and recorded on a database known as a “blockchain.”
“The central reason cryptocurrency can be so problematic in a divorce is that the numbers on the blockchain cannot be traced to a certain individual or owner of the currency without the ‘private key,’” Ms. Burris wrote. “The private key is the password held by the individual owner of the unit of cryptocurrency that allows them to spend or trade the units on the blockchain. If the private key is not known or is lost, it is impossible to access the cryptocurrency or trace it back to an individual. Consequently, when confirming whether someone has cryptocurrency, the private key must be known.”