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Digital assets have been legally recognized as part of marital property in divorce cases, even deeming cryptocurrencies soon to be included in the global financial system, and the Korean system leads its way with this move. According to a 2018 Supreme Court judgement, the country has classified all kinds of assets, tangible and intangible, as being divided during divorce proceedings. In light of this, cryptocurrency has also been included within this category within an existing legal framework. This is a major move towards integrating digital currencies into the contemporary world of finance.
<h2 id="strong-the-legal-framework-recognizing-crypto-as-property-strong">The Legal Framework: Recognizing Crypto as Property</h2>
What is different in this case is that Article 839-2 of the Korean Civil Act <a href="https://www.thekoreanlawblog.com/2024/10/korean-divorce-cryptocurrency-asset-division.html" target="_blank" rel="noopener noreferrer nofollow">allows the</a> division of property, and virtual assets such as Bitcoin, Ethereum, and other cryptos are now included in the category. This allows for these assets to be considered intangible property under South Korean law and potentially part of a divorce settlement. This labelling allows the courts to make “fact-finding investigations” into all these hidden crypto assets. This kind of transparency is necessary because it is more difficult to find out the origin of cryptocurrencies since they are very easy to move between countries.
<figure id="attachment_49547" aria-describedby="caption-attachment-49547" style="width: 100%" class="wp-caption aligncenter"><img fetchpriority="high" decoding="async" class="wp-image-49547 size-full" src="https://thebitjournal.b-cdn.net/wp-content/uploads/2024/10/DALL·E-2024-10-10-14.24.24-A-courtroom-in-South-Korea-with-a-judge-presiding-over-a-divorce-case-involving-cryptocurrency.-A-large-screen-behind-shows-a-blockchain-ledger-highl.webp" alt="Can Crypto Hide in Divorce? South Korea Says No" width="1792" height="1024" title="Can Crypto Hide in Divorce? South Korea Says No 1">
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 Can Crypto Hide in Divorce? South Korea Says No
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Blockchain technology can prove to be a solution in this respect, as it offers an open and unchangeable ledger in which every transaction is entered. Unlike conventional assets that can sometimes be hidden or manoeuvred, Blockchain ensures the traceability of all crypto transactions, helping forensic accountants and legal authorities uncover concealed wealth in divorces. Obviously, the courts are still in a bit of disarray, but that has helped them become more transparent without any outside interference and marked one of many advancements in how digital currencies play into legal battles surrounding finances.
<h2 id="strong-crypto-in-divorce-cases-global-and-local-trends-strong">Crypto in Divorce Cases: Global and Local Trends</h2>
The growing prevalence of cryptocurrencies in financial transactions has added a further layer of complication to divorce proceedings around the world, and South Korea is seemingly no exception. This inclusion of cryptocurrencies in marital estates reflects the increasing relevance of digital assets, part of a trend recognized internationally across multiple jurisdictions. More frequently in recent years, divorce cases have occurred where the involved parties failed to disclose their digital currency assets, raising the question of how legal structures can merge with the dark corners of crypto.
For example, in a recent New York divorce case, a woman hired a forensic accountant to uncover her husband’s hidden Bitcoin holdings. The investigation revealed 12 BTC worth approximately $500,000 stored in an undisclosed wallet. This case emphasizes how cryptocurrencies can be used to conceal wealth, making the need for thorough investigations crucial. Similar cases are expected to rise in South Korea as well, given the country’s proactive approach to cryptocurrency regulations.
<h2 id="strong-options-for-dividing-cryptocurrency-holdings-strong">Options for Dividing Cryptocurrency Holdings</h2>
There are two main ways of splitting up crypto assets during a divorce: liquidation or direct division. The spouses may liquidate the cryptocurrency at the current market rate and share in any proceeds; alternatively, they can opt to distribute the coins themselves. It comes with its benefits and costs, depending on what the crypto market looks like at the time of closing. If, for example, the couple agrees on a split of the tokens as opposed to them being sold off, then they will need to take into account that in future, their value could rise or fall.
This agility with digital resources underscores the importance of evaluating market particulars. Cryptocurrency is extremely volatile, and so its worth could fluctuate greatly post-divorce compared to the current settlement, which may alter the financial result for both parties. In this new reality, as cryptocurrencies are taking root within the financial system, legal experts and divorcees alike should be attentive to how these assets should be addressed.
<figure id="attachment_49551" aria-describedby="caption-attachment-49551" style="width: 100%" class="wp-caption aligncenter"><img decoding="async" class="wp-image-49551 size-full" src="https://thebitjournal.b-cdn.net/wp-content/uploads/2024/10/DALL·E-2024-10-10-14.24.30-A-South-Korean-couple-discussing-the-division-of-cryptocurrency-assets-during-divorce-proceedings.-A-computer-screen-in-the-background-shows-crypto-co.webp" alt="Can Crypto Hide in Divorce? South Korea Says No" width="1792" height="1024" title="Can Crypto Hide in Divorce? South Korea Says No 2">
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<h2 id="strong-conclusion-a-new-era-of-financial-settlements-strong">Conclusion: A New Era of Financial Settlements</h2>
The willingness of South Korea to accommodate cryptocurrencies in divorce cases is part of the trend seen around the globe where jurisdictions are maturing from ignoring digital assets in financial matters to taking them into consideration. Blockchain technology allows for more accurate tracing of the provenance of a crypto asset, and as such, courts worldwide can more easily apply legal doctrines to aid with all of the complex questions regarding digital currencies. This will help ensure that cryptocurrencies are not used to hide wealth and have been regarded as a welcome development for couples going through divorce.
As South Korea moves toward legal legislation and digital currencies become more prominent on a global scale, it is likely that other countries may adopt cryptocurrencies in family law suits as well. This will signal the start of a new age in financial settlements where digital assets represent an important component, transforming property division in divorce cases establishment.
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Can Crypto Hide in Divorce? South Korea Says No

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