If you are getting divorced and you or your spouse own cryptocurrency, you may have questions about how those assets are treated in a divorce. Digital currencies have become more common over the past decade. Many people now hold them alongside stocks, retirement accounts and other investments.

Even though cryptocurrency exists online rather than in a traditional account, New Jersey courts generally treat it as property. If it is part of your finances, it may become one of the assets considered during your divorce.

Cryptocurrency is not invisible to the court

Some people assume cryptocurrency is difficult to find because it does not sit in a traditional bank account. However, buying, selling and trading digital currency usually creates financial records that can appear during a divorce. The following records may show cryptocurrency activity:

• Cryptocurrency transactions reported on tax returns
• Accounts held with cryptocurrency exchanges
• Transfers of funds to digital trading platforms
• Cryptocurrency listed in financial disclosures
• Transaction histories produced during discovery

These records can help show whether cryptocurrency exists and how it fits into the couple’s finances.

How courts may treat cryptocurrency

New Jersey uses equitable distribution when dividing marital property. This means a court divides assets in a way it considers fair based on the facts of the marriage.

If cryptocurrency is involved, the court may look at when you bought it and how you paid for it. Cryptocurrency purchased during the marriage may qualify as marital property. Cryptocurrency acquired before the marriage may remain separate property in some situations. Financial records can help show where the asset came from and whether marital money helped pay for it.

Warning signs that cryptocurrency could become an issue

If your spouse handles most of the household investments, you may not know much about certain holdings. In some cases, financial information exchanged during the divorce may reveal digital currency holdings. The following circumstances may draw attention to possible cryptocurrency holdings:

• Making large transfers to unfamiliar investment platforms
• Showing a sudden interest in digital currency trading
• Maintaining incomplete financial records
• Reporting income that does not match spending patterns
• Moving money between multiple financial accounts

These circumstances do not automatically indicate hidden assets. They may, however, raise questions about whether additional investments exist.

How cryptocurrency can affect the division of assets

The value of cryptocurrency can vary widely from one household to another. For some couples, it may be a small investment. For others, it may make up a large part of the marital estate.

Because of that, cryptocurrency may become part of property discussions during a divorce. Its impact will depend on when the couple acquired it, how they funded it and the role it played in their finances.