The division of assets on a divorce is one of the most contentious issues facing both couples and family lawyers. With the advent of digital assets such as cryptocurrencies lawyers are having to consider digital assets and their division in the dissolution of a marriage more and more frequently.
The division of assets on a
divorce is one of the most contentious issues facing both couples and family
lawyers. With the advent of digital assets such as cryptocurrencies
lawyers are having to consider digital assets and their division in the
dissolution of a marriage more and more frequently.
With the rising value and
popularity of crypto-assets their importance in a divorce cannot be
understated. The lawyers job has become increasingly more difficult and the
must ensure that they have properly identified all their digital and
crypto-assets. Crypto-assets can include cryptocurrencies and tokens,
digital manuscripts, musical recordings, artwork, photographs, online gaming
accounts, online gambling accounts, online gift cards, Domain Names, social
media accounts, prepaid accounts, Paypal, Revolut or similar accounts, and
other digital assets such as virtual pets.
While the notion of a virtual pet
such as a crypto-kitty might seem absurd their value must not be
underestimated. One such crypto-kitty sold for more than $100,000 on 2 December
2017 and the market cap of the crypto-kitty market place stands at nearly $6
million at the time of writing. It with these valuations in mind lawyers
dividing crypto-assets the lawyers must consider the two most difficult
aspects. Firstly, their volatility and secondly their privacy and secrecy
meaning crypto-assets are difficult to trace and hard to value. Although
parties have a duty to provide full disclosure of their assets in a divorce,
the pseudo-anonymous nature of crypto-assets could potentially make them a safe
haven for spouses wishing to hide their assets from spouse in a divorce.
With divorces being acrimonious
in their nature if one party decides not to disclose the true value of their
holdings in a divorce, it serves to add time and expense to the proceedings.
The lack of physical paper trail is a new phenomenon and something family
lawyers have not had to deal with in the past. Ideally family
lawyers would enlist the help of a qualified technology lawyer to ensure their
clients’ interests are protected and a proper audit of a partners crypto-assets
can be undertaken, in more extreme cases a digital forensics expert can be
brought in to search through the spouse’s email to determine what transactions
have taken place. Technology lawyers know that there are tools to
trace crypto-assets. The difficulty is that some family lawyers do not
necessarily understand crypto-assets and a lawyer needs knowledge of the asset
you’re trying to get hold of.
Valuing crypto-assets is not as
straightforward as ordinary investments, such as property or shares, the
constant change in value means valuations will need to me made at regular
intervals throughout a divorce, with a valuation agreed upon on the date of the
final hearing. Potentially a fortune could be worth significantly less by
the time the decree of divorce has been granted. Another method in
splitting the assets is to divide the number of assets and then each party
takes on the volatility risk of their portion.
As crypto-assets are a relatively
new asset class the Irish Courts do not have a wealth of knowledge to draw upon
and they are relying on lawyers to propose solutions to the various issues that
arise. The arsenal at the disposal of the Irish Courts to secure
assets, such as injections, may be difficult to administer in the case of
crypto-assets due to their decentralised and global nature.
Ireland, by marked contrast to the most recent position in the US, the Central
Bank of Ireland has confirmed that crypto-assets are not currently legally
regulated. Accordingly, it would appear that they do not fall within any
traditional definition. However, there are various sources confirming
that there will be regulation brought in at a European level that will oblige
member states to legislate for the regulation of crypto-assets, but for now,
dividing the crypto-kitty may be as difficult as dividing
A Norwich Pharmacal Order is a legal order that is used to compel an innocent third party to disclose information about another party who is involved in some form of malfeasance. Norwich Pharmacal Orders are becoming a common legal tactic to stifle online trolls on social media, as well as trace anonymous individuals onlineText Link
If you are a VASP in Ireland, you will need to register with the Central Bank for AML/CFT purposes. If you are a firm that is not established in Ireland, or you are not conducting business as a VASP before the 2021 Act was brought in, then you must be registered with the Central Bank before any services commence. As part of the regulation of VASPs with the Central Bank of Ireland, individuals holding pre-approval controlled functions within a VASP must be approved under the latest fitness and probity regime of the Central Bank.Text Link
Digital inheritance is a new term that is becoming more widespread across the globe in relation to the transfer of digital assets in a broad sense. There is a completely new "digital asset" that has been created in terms of cryptocurrencies and therefore with that, inheritance queries follow.Text Link
Ireland has slowly but surely established itself as an alluring destination for businesses in the Fintech sector. From a solid regulatory framework to an advanced financial services ecosystem, Ireland’s financial technology sector is booming right now and is home to a surprising number of reputable domestic and international payment institutions. Let's take a closer look at the reasons behind this below.Text Link