How is Cryptocurrency Handled in a Divorce in Georgia?
Cryptocurrency is handled in a divorce in Georgia just like other properties, such as cars and retirement accounts. That is, if a cryptocurrency is found to be a marital property, then it will be subject to an equitable division. Determining whether or not your cryptocurrency is marital property (subject to be divided in a divorce) or separate property (not subject to be divided in a divorce) can sometimes be difficult. It is best to speak with a qualified attorney about your crypto assets in a divorce.
For a free telephone consultation with an experienced divorce and family law lawyer please call Meriwether & Tharp at (678) 879-9000.
What is Cryptocurrency?
A cryptocurrency is a type of convertible virtual currency. Just like coins and paper money issued by the government, a cryptocurrency may be used to make purchases while being traded among users. However, cryptocurrencies are not backed by the government and are technically not "real currency". Cryptocurrencies are a part of a larger category of assets called digital assets. Stablecoins and non-fungible tokens (NFTs) are also examples of digital assets.
Under Georgia law, "virtual currency" is defined as "a digital representation of monetary value that does not have legal tender status as recognized by the United States government." O.C.G.A. ยง 7-1-680.
There are thousands of types of cryptocurrencies, from Bitcoin to Ethereum. As of 2023, it is estimated that there are over 10,000 different cryptocurrencies in circulation.
Is my Spouse Hiding Crypto? Can you Hide Cryptocurrency in a Divorce?
No, you cannot hide cryptocurrencies in a divorce in Georgia. Failure to disclose assets such as cryptocurrencies could result in serious, adverse consequences in a divorce case, such as being subject to an award of attorney's fees and expenses.
Spouses hiding assets in cryptocurrencies presents a serious, on-going concern for divorce lawyers. Most cryptocurrencies have a blockchain, which means that cryptocurrency transactions could be traced by using open source or subscription analytical tools. However, some cryptocurrencies are anonymous or private, making it difficult to be traced.
If there are red flags, such as a mismatch between disclosed funds of a spouse and that spouse's actual income, then hiring a forensic investigator to track down hidden assets, including cryptocurrencies, may be a wise decision.
Do you have to Split Cryptocurrency in a Divorce?
Cryptocurrencies, just like a marital home or car, may be subject to an equitable division in a divorce. Only cryptocurrencies that are considered marital property would be divided. Cryptocurrencies that are considered separate property would not be divided. Determination of whether a cryptocurrency is marital property or not would follow the same analysis used to determine whether certain stocks or stock options are marital property or not. Read more about determining whether assets are marital or separate here.
Does Cryptocurrency Count as an Asset?
Yes, a cryptocurrency counts as an asset, just like Exchange Traded Funds (ETFs) and mutual funds. More specifically, cryptocurrencies are a type of digital assets. Therefore, in a divorce in Georgia, the spouses are required to disclose cryptocurrencies on his or her Domestic Relations Financial Affidavit (DRFA). Also, information and documents regarding cryptocurrencies are discoverable and relevant to divorce cases.
Is Cryptocurrency Considered Income?
Yes, a cryptocurrency may be considered as income in a divorce case and may be considered in calculation of child support or alimony. For example, if a spouse regularly invests in and trades digital assets such as cryptocurrencies and earns profits, then these profits will be counted as income. In the context of income, cryptocurrencies are not different than dividend stocks or distributions.