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California courts require bitcoin disclosure for asset division

The severing of marital ties through a legal process is not always easy, especially when it involves financial complications. Duringe divorce negotiations, couples need to identify what assets they have, how many of them have been acquired post-marriage, and what their respective values are. Once that has been done, they then divide these assets in an equitable manner.

But laying out the steps and successfully navigating them are two different things. When the waters get choppy, parties may want to seek the advice of experienced lawyers in order to ensure they are receiving what is rightfully theirs. That is especially true in complex property-division cases involving unconventional assets. One unconventional asset that has become increasingly common is Bitcoins, a new kind of currency that has it made it easier for individuals to hid their assets from their former partners.

Trying to hide assets with the aim of retaining sole control over them in case of a divorce is nothing new. However, using the internet and cyber-currency such as Bitcoins to do the same is an innovative step. Not only is it almost impossible to trace currency ownership to individuals, but such an arrangement also makes the assets liquid. This means one can readily shift them to places beyond the court's control.

California courts have tried to respond to this problem by mandatorily requiring bitcoin disclosures in certain divorce hearings so far. If the words of the lawyers experienced in such matters are any indication, the use of "cryptocurrency" such as bitcoin, in asset division may render such division complicated in days to come.

Source: Vox, "Divorce lawyers worry about assets being hidden in bitcoins," Danielle Kurtzleben, June 4, 2014

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