Does Your Spouse Own any Cryptocurrency?


The New York Times recently reported on a San Francisco couple that fought over digital currency worth millions of dollars. Some of the holdings were in a cryptocurrency exchange, Mt. Gox, that went bankrupt in 2014. This meant the holdings there were gone/inaccessible.

Ultimately, the appeals court found that the husband had failed to keep his wife fully apprised of his cryptocurrency investments. It awarded the wife about half of the original holdings.

Keep Your Spouse Informed

That is something you and your spouse should be aware of as your divorce proceeds. You need to keep each other notified of any assets and debts, and changes that occur. SquareFairy enables you to update your Property and Debt tab, and generate the appropriate forms that are provided to your spouse.

You want to do this for a few reasons:

  • It is the right thing to do, so you and your spouse can equitably distribute your marital assets.
  • If you (or your spouse) do not, and the court finds out, the court will not treat the person hiding assets kindly. So it is better to be honest throughout.

Why is Cryptocurrency So Difficult?

Your bank or investment account typically send you statements monthly or quarterly. But cryptocurrency is tied to an “address” like “1BvBXXXXstWetqTXx5Au4m4XXg7xJaNxxx.” If you know the address, you can send cryptocurrency to it. The bitcoin needs to be held at an exchange (such as Coinbase or in order to exchange access it.

While the amount of cryptocurrency is in fact very public (a distributed public ledger contains all transactions), without the address or exchange information, you cannot get it out.

As in the case of the New York Times story’s couple, the spouse alleged the husband had hidden some of the cryptocurrency. And as they found out, when the exchange went bust, it was like a gang robbing a bank and taking all the money from the safe. And unlike most banks, that have lent the money out in loans, an exchange is nothing but an online vault. If someone empties the exchange, the money is gone. (note: the US government was recently able to track down a New York couple who had stolen cryptocurrency, so thiefs should not feel they are free.)

How to Use SplitFairy to Track Cryptocurrency

You can split cryptocurrency into incredibly tiny fractions. While the state does not have a category specifically for this asset type, we suggest you consider it Cash. This way, the SplitFairy can split it up automatically. SplitFairy cannot automatically split some asset types, like Vehicles or Other Assets. Be sure to give it a reasonable description, but do not enter account information.

Adding BitCoin as an Asset

If you decide to do so, you can assign all of the cryptocurrency to one spouse or the other. But since it is such an easily split and transferred asset, let SplitFairy use it as a balancing mechanism.

BitCoin in SplitFairy

Mark Streich

Mark is one of the cofounders of SquareFairy, dedicated to helping struggling couples move forward, so they can rediscover the joy in their lives.