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Bitcoin Frenzy- Is the Family Court ready for this new development?

In: Family Law NewsGeneral News

Despite the many reforms in family law, one could argue that the family court remains entrenched in a more old-fashioned way of dealing with matters rather than welcoming the changes presented by new technology, and the benefits it presents for the courts and the clients. This is not just in the way it considers and manages cases, but also in how it considers and treats matrimonial assets

Recently, we have seen an extraordinary development in Bitcoins, and other cryptocurrencies, and rise in the number of people who are investing their wealth in these. Bitcoin is a worldwide digital currency developed in 2009, which has seen a rise to almost mainstream popularity over the past year or so. Bitcoin is digital and like cash it is hard to trace as it is digital repository and a virtual currency that uses cryptography for security and it does not have a central bank or storage place. This makes it difficult to determine a person’s wealth from any investments they hold. The currency has also been extremely volatile, and it can be hard to pinpoint their value. Furthermore, Bitcoin affords privacy to investors which make it difficult to link to individuals.

For spouses who are involved in divorce proceedings, this could pose potential difficulties if they have reason to believe that their spouse is hiding asserts. In financial proceedings full and frank financial disclosure is vital and with the growing trend in Bitcoin investments the family court could see a rise in the number of spouses who are using such investments as a way to hide assets from estranged partners in divorce settlement cases. For clients this could mean they are spending more money trying to find out if there are any hidden asserts, than on actually reaching a financial settlement. It also could well result in the divorce process becoming more contentious and lengthy, which could cause a strain on the court’s already stretched administration.

The question of how the family court will scrutinize, manage and quantify the crypto currency could frenzy remains unknown. Bitcoins could yet become an asset which becomes a central part of discussions in financial settlement cases if they continue to rise in popularity.