What Happens to Cryptocurrencies During a North Carolina Divorce?

Board Certified Family Law Specialist Matt Arnold answers the question: ” Is there some property that the judge cannot divide?”


Since Bitcoin and a plethora of other cryptocurrencies have become a crucial – and rather sizeable – investment and currency in many people’s lives, you may be wondering about the legality of cryptocurrencies and their role in North Carolina divorce settlements.

bitcoin-Charlotte-Monroe-Mooresville-Equitable-distribution-lawyer-300x169The astronomical value of cryptocurrencies makes them a rather substantial asset in any divorce settlement, but do North Carolina courts recognize Bitcoin and other blockchain-based cryptocurrencies during property distribution?

If you have cryptocurrencies and are going through a divorce in Charlotte or other parts of North Carolina, you may want to speak with our Charlotte family law attorney at Arnold & Smith, PLLC, to determine the legal status of your Bitcoins and other cryptocurrencies.


Do North Carolina Courts Recognize Cryptocurrencies in Divorce Cases?

Bitcoin – or any other cryptocurrency, for that matter – is a medium of exchange that is stored electronically in the blockchain. In other words, a cryptocurrency is a virtual currency that uses encryption techniques.

Until about three years ago, cryptocurrencies had been non-existent in most people’s lives. However, as an increasing number of people begin investing in Bitcoin and other blockchain-based currencies, they have become more relevant in divorce settlements.


The Role of Bitcoin and Other Cryptocurrencies in Divorce Settlements

Before the North Carolina Money Transmitter Act was signed into law in July 2016, divorcing spouses were unable to “split” the cryptocurrency investment as marital property because virtual currencies did not have legal status.

After the North Carolina Money Transmitter Act, virtual currencies were given legal recognition as a sizeable form of investment or asset. Following the Act, North Carolina courts have begun to recognize cryptocurrencies in divorce settlements.


What Happens to Your Cryptocurrencies During a North Carolina Divorce?

If you have Bitcoin or other virtual currencies, there is a good chance that a North Carolina court will identify them as marital assets if you purchased them after the wedding and before the separation or divorce.

However, as the value of cryptocurrencies can be volatile, things get more complicated if you bought a virtual currency before your marriage, and then it skyrocketed in value. In that case, the court may still identify the increased value of the cryptocurrencies as marital property.


Distribution of Cryptocurrencies During Divorce

Distributing or “splitting” cryptocurrencies as marital property is rather complicated due to the unstable nature of their valuation. For example, in December 2017, Bitcoin was worth nearly $20,000. In less than a year, in October 2018, Bitcoin was devalued to $6,300.

The volatile value of cryptocurrencies makes it difficult for North Carolina courts to place an actual value on virtual currencies on the day of the divorce settlement. Unlike stock assets, which are valued by using their close of trading price, there is no real close of trade with Bitcoin and other cryptocurrencies.

Some parties in a North Carolina divorce will choose to split cryptocurrencies, which are identified as marital property in a divorce, in real-time on the day of separation. Thus, both parties would individually gain financially or bear the losses associated with the price fluctuations.

Mediation and collaborative divorce could help reach a consensus on how your cryptocurrencies will be split with your spouse.


Consult with a Charlotte family law attorney if you are worried about the future of your cryptocurrency investment in divorce. Contact Arnold & Smith, PLLC, to determine how your cryptocurrencies will be split in a divorce.  If you find yourself facing a complicated family law matter and need the help of experienced family-law attorneys, speak with our detail-oriented and well-versed lawyers in or around Charlotte, Lake Norman, or at our new office in Monroe, please contact Arnold & Smith, PLLC today at (704) 370-2828 or find additional resources here.







The family law practice group at Arnold & Smith, PLLC includes two Board-Certified Family Law specialists and one Child Welfare Law specialist, as well as several attorneys with many years of family law experience that are committed to providing a powerful voice to individuals facing the often-tumultuous issues in this area of law. The range of issues our family law clients may be facing include pre- and post-nuptial agreements; separation agreements; post-separation support; child support (both temporary and permanent); absolute divorce; divorce from bed and board; military divorce; equitable distribution of assets; child custody (both temporary and permanent); retirement benefits and divorce; alimony and spousal support; adoption; and emancipation. Because this area of the law is usually emotionally charged and complicated, the family law attorneys at Arnold & Smith, PLLC act with the utmost dedication to ensure that each client understands his or her options, and then act to achieve the best result possible for that client’s particular situation.






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