Cryptocurrency used to feel like a niche hobby. Now it shows up in everyday divorce cases. A spouse may hold Bitcoin on an exchange, stake Ethereum, collect NFTs, or keep a hardware wallet in a desk drawer. Some couples also build wealth through online businesses, gaming items, and other digital assets.
If you suspect crypto is part of your marital estate, you are not alone. Still, crypto adds twists that traditional assets do not have. It can move fast. It can hide in plain sight. It can swing in value overnight. And if one spouse controls the logins or wallets, the other spouse can feel shut out.
Washington courts divide property in a “just and equitable” way. That includes both community and separate property. Washington State Legislature
So, the goal is not panic. The goal is clarity.
At Story Law in Bellevue, our family law team helps clients sort through digital assets with a steady plan. This guide explains what counts as cryptocurrency and digital assets, how disclosure works, how people value crypto, and how division often happens in real cases.
What Counts as Cryptocurrency and Digital Assets
People often say “crypto” when they mean many different things. In divorce, it helps to name the asset type.
Common examples include:
- Cryptocurrency held on exchanges (Coinbase, Kraken, Gemini, Binance.US, and others)
- Coins or tokens in software wallets (MetaMask, Trust Wallet)
- Hardware wallets (Ledger, Trezor)
- NFTs and collectibles stored in wallets
- Stablecoins (like USDC), often used as “cash” inside crypto platforms
- DeFi positions (lending, liquidity pools)
- Staking rewards, interest, and yield
- Airdrops or token distributions
- Online accounts that hold value (creator accounts, monetized channels, domain portfolios)
- Digital items with resale value (some gaming assets)
For tax purposes, the IRS treats digital assets (including virtual currency) as property, not currency. IRS+1
That matters because “property” rules shape how people track basis, gains, and future tax exposure.
How Washington Divorce Law Treats Property Like Crypto
Washington divides property and debts in a way the court finds “just and equitable,” and the statute applies to both community and separate property. Washington State Legislature
That broad category can include cryptocurrency and other digital assets.
Here is the practical takeaway: if the asset has value, the divorce process may need to address it.
Many couples also assume Washington means a strict 50/50 split. Courts often divide things evenly, yet they have discretion and look at the full picture. Lasher+1
Why Cryptocurrency Creates Unique Divorce Problems
Cryptocurrency behaves differently than a bank account or a house.
It can be easy to move
A spouse can transfer crypto to another wallet in minutes. That transfer can happen 24/7.
It can be hard to spot
Some transactions do not show up as clearly as a paycheck deposit. A person may buy crypto through an exchange, a payment app, or even a peer-to-peer transfer.
It can change value quickly
A portfolio can rise or drop sharply in a short period. That makes valuation and timing a bigger issue than with many traditional assets.
Access can be one-sided
If one spouse controls the phone app, the seed phrase, or the hardware wallet, the other spouse may not be able to confirm balances without legal tools.
Disclosure: The First Step in Any Digital Asset Divorce
In Washington divorce, both spouses typically must disclose assets and debts as part of the process. When cryptocurrency exists, disclosure should include:
- Where the crypto is held (exchange, wallet, hardware device)
- What coins or tokens exist
- How the crypto was purchased (income, savings, inheritance, pre-marriage funds)
- Current balances and transaction history where available
If you suspect missing crypto, you can often start with ordinary records:
- Bank statements showing transfers to exchanges
- Credit card statements showing purchases
- Tax returns that show crypto activity
- App lists and email confirmations from exchanges
If that does not resolve it, a lawyer can use formal discovery tools in the case.
Protecting Digital Assets During the Divorce
Many people worry about a spouse moving money once divorce becomes real. Courts can issue restraining orders or temporary orders that limit transfers of property during the case. Washington resources discuss temporary and immediate restraining orders in family law matters. Washington Law Help
Some counties also use standard restraining order forms that restrict transferring or hiding property after filing. Pierce County
Every case is different. Still, if crypto is involved, early planning helps because transfers can happen fast.
Practical steps often include:
- Taking screenshots of known account balances and wallet addresses
- Downloading exchange statements and transaction history
- Preserving emails and text messages about purchases
- Asking your lawyer about temporary orders early, when the risk is high
Valuation: How Do You Put a Number on Cryptocurrency?
Valuation is one of the biggest friction points in crypto divorce. The price can change between:
- the date of separation,
- the date of filing,
- the date of settlement,
- and the date of trial.
There is no single rule that fits every case. Couples often choose a valuation method that matches their situation, such as:
- A specific “as-of” date (for example, a date near separation)
- An average price over a set period (to smooth volatility)
- A real-time value at the moment of transfer (common when both spouses will keep crypto)
A careful approach also looks at:
- transaction fees,
- taxes that may come later,
- and liquidity (some tokens are hard to sell).
Taxes: The Part People Miss Until Later
Crypto division can look simple on paper. Then taxes show up.
The IRS generally treats digital assets as property. IRS+1
That means future sales may trigger capital gains or losses.
Also, when spouses transfer property “incident to divorce,” federal tax rules can treat that transfer differently than an ordinary sale. The IRS explains what “incident to divorce” means in its divorce publication. IRS
This is not tax advice. Still, it is wise to talk with a tax professional if your divorce includes significant crypto, especially if one spouse will sell soon or if the portfolio includes large unrealized gains.
Separate vs. Community: Tracing Matters
A common question is: “I bought crypto before marriage. Do I have to split it?”
In Washington, timing and sourcing often matter. Crypto acquired before marriage may be separate property. Crypto acquired during marriage may be community property. Growth can complicate the picture, especially if the account mixed pre-marriage holdings with marital contributions.
This is where records matter:
- Exchange statements showing your starting balance
- Wallet addresses that show deposits over time
- Bank records that match purchases to dates
- Documentation of gifts or inheritance funding
Good tracing can keep the division fair and reduce conflict.
Common Ways Couples Divide Cryptocurrency in Divorce
There are a few patterns that show up often.
Option 1: Split the cryptocurrency itself
Each spouse receives a share of the same coins or tokens. This approach can feel clean, especially when both spouses want to keep crypto. It also avoids “who got stuck with the volatile asset.”
This option requires safe transfers and clear documentation.
Option 2: One spouse keeps crypto, the other gets other assets
One spouse keeps the portfolio, and the other spouse receives an offset. That offset might be cash, home equity, or a larger share of another account.
This option can work well, yet it must account for taxes and volatility.
Option 3: Sell and divide the proceeds
Some couples sell the crypto and split net proceeds. This approach can simplify division, yet it may create a taxable event.
What If a Spouse Hides Cryptocurrency?
Hiding assets can backfire in divorce. Courts take disclosure seriously, and consequences can follow when a spouse conceals assets. McKinley Irvin
If you suspect hidden cryptocurrency, clues may include:
- transfers to exchanges you do not recognize
- unexplained cash withdrawals followed by “missing” funds
- tax documents showing crypto activity
- frequent use of crypto apps or hardware devices
A family law lawyer can help you request records, subpoena exchanges when appropriate, and build a clear financial timeline.
Collaborative Law vs. Litigation When Crypto Is Involved
Some couples can handle digital assets through collaborative law. That works best when both spouses share information and want a respectful process.
Collaborative law can help when:
- both sides agree to full transparency,
- the crypto holdings are not disputed,
- and the focus is on practical division.
In other cases, litigation becomes more likely.
Litigation may be needed when:
- one spouse controls access and refuses disclosure,
- the portfolio includes complicated DeFi activity,
- or one spouse appears to be moving assets.
At Story Law, we support both approaches. We aim for solutions that protect dignity. We also prepare carefully when the case needs court involvement.
Questions to Ask Your Lawyer About Cryptocurrency
If you are meeting with a divorce lawyer in Bellevue and crypto is part of your marriage, here are useful questions:
- What documents should I gather first?
- How do we confirm balances and transaction history?
- Should we request temporary orders to prevent transfers?
- What valuation method fits my case?
- How do we account for taxes and future gains?
- Do we divide crypto directly, or offset with other assets?
- What should we do if we suspect hidden wallets?
These questions lead to better planning and fewer surprises.
How Story Law Helps With Cryptocurrency and Digital Assets
At Story Law in Bellevue, we help clients handle cryptocurrency issues with a calm, organized approach.
Our work often includes:
- building an inventory of digital assets
- working through disclosure and documentation
- developing a fair valuation plan
- negotiating divisions in collaborative law settings
- preparing for litigation when transparency breaks down
Crypto can feel intimidating. Still, with the right plan, it becomes manageable.
Talk With a Bellevue Family Law Lawyer Who Takes Digital Assets Seriously
If you are dealing with cryptocurrency in a Washington divorce, you deserve guidance that matches the complexity of the asset. You also deserve a lawyer who explains options clearly and treats your concerns with respect.
Story Law supports clients across Bellevue and the surrounding communities with practical family law representation. If you want help identifying, valuing, and dividing digital assets, our team is ready to talk.
