Beware of smuggling: How to distribute virtual currencies in the event of a divorce?

It seemed like it was only a matter of time before virtual currencies were at the center of divorce disputes. How do you deal with smuggling these coins, and can it be prevented in advance?

Valuing virtual currencies is no big deal (Photo: ShutterStock)

Divorce in divorce proceedings (Photo: ShutterStock)

Distributed currencies, crypto currencies or virtual currencies, are innovative and unique payment methods; The value of these coins is not dictated by any central body, and is not determined by commodity value, but is derived from a user network agreement. Bitcoin is of course the most recognized virtual currency, partly because of being a pioneer in the field.

The number of users of distributed currencies varies from year to year, so it is no wonder that they began to emerge as divisive and divisive in divorce cases as well. What makes it particularly complex is the unique nature of these coins. Attorney Galina Talanker of the law firm Talanker and Merdenianz answers common questions on the subject:

What makes the issue of virtual currencies in divorce cases so complex?

In divorce cases, to divide the property fairly, we need several steps: First, we must understand the extent of the couple's property; Next, we will assess the value of the property; And finally, determine what each party's share of this property is. Valuing virtual currencies is not a matter of fact. For example, there was a recent controversy over the value written in a divorce case. The amount stated in the Ketubah was 30 Bitcoin coins, and the court was required to decide on the exchange rate to be used as the basis for estimating the amount.

In addition, in divorce disputes there is always a danger that one spouse will try to smuggle common property, and in the case of virtual currencies, the risk is particularly high.

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The uniqueness of virtual currencies versus other assets

Unlike any other property, virtual currencies are perhaps the easiest to smuggle, as they are not controlled and not subject to entities such as governments or banks. When it comes to a pension or apartment fund, for example, you can apply with an appropriate order to the relevant body and get information about the property. In the case of virtual currencies, on the other hand, there is no factor that can provide us with information or allow us to register a judicial order to delay the smuggling of property.

Also, virtual currency operations are only possible through a digital wallet protected by a secret code. Today there is no direct way to prove who the digital wallet is, as there is no neat register of wallet holders. Furthermore, a digital wallet that has lost its access code will not be able to control the currency, despite being its owner.

Can virtual coins be smuggled in advance?

The best way to prevent the smuggling of virtual currencies, and of common property in general, is by drawing up a financial agreement. The coin agreement must specify the common currencies, specify sanctions to be taken in the event of a breach of agreement, and refer to the currency's binding exchange rate. Thus, in the course of the day, it will be possible to resolve issues relating to the smuggling of property or sharp fluctuations in the value of the currency.

In addition, it is worth taking non-legal steps as a preventative action. Such a step could be a loyal appointment that will hold the access to the digital wallet fully and provide each spouse only certain parts of each password. This ensures that the couple must cooperate in order to perform currency operations.

Another option is to create a "smart digital contract" that requires the couple's signature to perform digital currency operations, much like a common bank account.

These non-legal measures will also be recorded in the financing agreement, which will require the couple to take them and determine the sanctions in the event of a breach of the agreement.

What to do when we have already detected a virtual currency smuggling by a spouse?

If virtual currencies are suspected of smuggling, there is a possibility to track the movements in the digital wallet. This can be done without a password, as this information is publicly available if we have the wallet number. If we can prove that there was indeed an smuggling, we can go to court and get the appropriate remedies.

Naturally, it is not possible to obtain a foreclosure order on virtual currencies, but it is certainly possible to settle other assets against the coins smuggled.

If virtual currencies are suspected of smuggling, there is a possibility to track the movements in the digital wallet (Photo: ShutterStock)

Bitcoin (Photo: ShutterStock)

Virtual around the world

In the event that our office handled, all of the couple's common property was invested in virtual currencies. In the midst of the divorce process, the man went outside the borders of Israel and took all the virtual coins with him. When he arrived on a short visit to Israel, we issued a deportation order from the country, and at the same time we were able to obtain the wallet number and the details of the transactions made in currencies. This case ended outside the court walls, with the woman's hand on top.

In light of the above, there is no doubt that given the complexity of the issue, controversies surrounding virtual currencies require the guidance of a lawyer with special expertise in the field and a deep understanding of the world of distributed currencies.

Attorney Galina Talanker of the Talanker & Mordenianz office, has been in the field of family law and real estate law for more than 12 years. Previously, she served as a lawyer in organizing a new family and as a legal advisor in the Israel Real Estate Appraiser's office.

Phone: 053-9387962

The article was written in collaboration with a legal zap website
The information presented in the article does not constitute or replace legal advice and does not constitute a recommendation for taking proceedings or avoiding proceedings. Anyone relying on the information contained in the article does so at his own risk.