CryptoCurrency and Divorce
FASTEST GROWING ASSET CLASS
Cryptocurrency has been the fastest growing asset class since Bitcoin was created in 2009. There were more than 19,000 cryptocurrencies and dozens of blockchain platforms in existence as of June 2022. Investing in cryptocurrencies is becoming more mainstream. Several universities, including my alma mater, Harvard, have invested a portion of their endowments in cryptocurrencies. A PwC survey in 2022 found that 38% of traditional hedge funds own cryptocurrencies. Fidelity Investments, Inc., the largest retirement plan provider in the U.S. allows employers to offer 401(k) retirement funds allocated to bitcoinMany hedge funds now own cryptocurrencies.
Polls report that approximately 21% of Americans and approximately 39% to 49% of Millennials have invested in cryptocurrency. Polls also indicate that about twice as many men have used cryptocurrency compared to women. Despite the increasing popularity of cryptocurrency, the current Illinois Supreme Court approved Financial Affidavit disclosure form for family law cases does not ask parties to disclose if they own cryptocurrency or digital assets. The Illinois Supreme Court has approved family court forms that are accepted by all courts throughout the state as part of its Access to Justice initiate.
Cryptocurrency and DIVORCE
For some parties to a Chicago divorce, tracing and valuing digital assets may be necessary in pursuing a fair settlement. In other Chicago divorces, a spouse may pursue a claim against the other spouse for the losses from crypto investments. Illinois offers a potential legal claim in divorces that is called dissipation. A dissipation claim might exist if one spouse lost marital funds due to reckless investments. When it comes to cryptocurrency and digital assets, dissipation claims can involve huge figures.
Digital assets may be more susceptible to losses in ways that other more traditional investments are not. Digital assets may be lost through hacking, forgetting the encryption key or password, and losing the hard drive containing the cryptocurrency. Substantial losses from hacking are common even among experienced cryptocurrency investors.
In the first seven months of 2022, $1.4 Billion was lost due to breaches on crypto bridges. In March 2022, hackers stole $615 Million from Ronin, a bridge supporting the nonfungible token game from Axie Infinity. In February 2022, hackers stole $320 Million from a crypto bridge backed by a Chicago-based trading firm. It is possible that in some Chicago divorce cases the spouse who unilaterally invested in digital assets while the marriage was undergoing a breakdown may be held accountable for losses from hacking when dividing marital property.
The Witt Law Firm is knowledgeable in handling cryptocurrencies and digital assets in Chicago divorce cases. Attorney Witt has lectured on cutting-edge issues involving cryptocurrency in divorces. In Illinois divorces, a spouse might have a legal claim against the other spouse because of losses from crypto investments. Assets can be marital property even if only one spouse was involved in their acquisition and the assets are titled in the name of only spouse. Whether a crypto investor believes in HODLing or day trading, many digital assets have lost significant value recently. In Chicago divorces, the digital assets, or losses related to them, can be a significant issue.
Highly-Rated Chicago Divorce Lawyer
If you want the best Chicago divorce lawyer, look no further than The Witt Law Firm, P.C. We strive to provide the best legal services to our clients going through divorce. Our awards include:
- American Institute of Family Law Attorneys – 10 Best Award
- Attorney & Practice Magazine’s Top 10 – Top 10 Family Law Attorney
- American Assoc. of Attorney Advocates – Top 10 Family Law Attorney
- Avvvo – 10.0 out of 10.0 Top Attorney
- Google – 5-Star Rating
- Illinois Bar Association – Appointed to The Family Law Section Council
- Illinois Bar Association – Appointed to The ARDC Committee
Attorney Tanya Witt has presented on Cryptocurrency and Divorce for the Illinois Institute for Continuing Legal Education (IICLE) for lawyers. Her presentation is available at Cryptocurrency and Dissipation: One Spouse’s Huge Loss May Be the Other Spouse’s Huge Gain | Illinois Institute for Continuing Legal Education – IICLE .
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