Demystifying Cryptocurrency
What is Cryptocurrency?
Cryptocurrency (“Crypto”) is a form of digital currency. Unlike the U.S. Dollar, Crypto is decentralized, meaning there is no central authority or government that issues it and regulates its value. Instead, transactions are recorded and secured by a public ledger called Blockchain. The most common cryptocurrencies are Bitcoin and Ethereum. Crypto is purely intangible and is stored on digital wallets. It is used to purchase goods and services like other currencies, or it can be held as an investment.
How to identify ownership
If you suspect your spouse owns Crypto, here are some of the ways to identify if they have ownership:
Bank and credit card statements: Look for transactions with a cryptocurrency exchange, i.e. Coinbase, Binance, etc. and large withdrawals and deposits of money.
Cryptocurrency exchange apps or digital wallet apps
Tax Records: Form 8949 (Capital Gains/Losses), 1099 MISC. Importantly, check the first page of the Form 1040 Income Tax Return to see if the cryptocurrency box is checked.
Wallets: Familiarize yourself on physical digital asset wallets and be on the lookout for any such devices.
Why it’s important:
Cryptocurrency is an asset that may have significant value. If it was acquired during the marriage, then it will be likely considered marital property and will divided like other assets. Understanding crypto can be daunting, but if you suspect that your spouse owns crypto, consult with an attorney on how to navigate locating and valuing these assets. Call our office at 240-396-4373 or click here to learn more.
