Cryptocurrency, NFTs, and the 'Metaverse': Addressing the Expanding World of Virtual Assets in Divorce Proceedings
53 Pages Posted: 30 Sep 2022
Date Written: September 26, 2022
Transactions involving virtual assets are increasing daily, with millions of people investing in cryptocurrency and most recently, Non-Fungible Tokens (NFTs). With billions of dollars being poured into virtual assets, family courts and practitioners are left scrambling to understand these assets and how to discover and value them. This Article sets forth a proposed framework for identifying, characterizing, valuing, and dividing virtual currency in dissolution of marriage cases. The framework follows four primary steps: (1) adopt uniform discovery requests tailored to uncover virtual currency, and review concurrently produced discovery for evidence of virtual currency transactions; (2) consult with financial experts and review existing virtual currency exchanges for transaction history and inception of title for virtual currency; (3) value the virtual currency as of the date and time of dissolution separate from the rest of the marital estate and address any future marital earnings received from virtual currency or assets; and (4) encourage like-kind division or immediate sale of virtual currency upon divorce. These steps, along with continuing legal and judicial education, will assist courts in ensuring an equitable or equal property division between spouses and protect against subsequent litigation seeking to modify or vacate previous judgments dividing virtual assets.
Keywords: cryptocurrency, NFTs, divorce, regulation, identification, characterization, divorce, valuation, division
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