The South Korean court recognizes cryptocurrency as a divisible asset in divorce proceedings, setting a new precedent as digital asset investment becomes increasingly common.
On October 10, South Korean law officially recognized cryptocurrency as a type of asset that can be divided during divorce proceedings, according to information from the IPG Legal law firm. This regulation is based on Article 839-2 of the South Korean Civil Code, allowing a spouse to request the division of common assets accumulated during marriage after divorce.
This recognition is based on the 2018 ruling of the Supreme Court of South Korea, which determined that cryptocurrency and virtual assets have economic value, regardless of their intangible nature. Therefore, any cryptocurrency accumulated during the marriage can be considered part of the common assets and must be fairly divided.
Mechanism for verifying and dividing cryptocurrency in divorce
To ensure transparency, the court may request an investigation and verification if one party is aware of the other party's cryptocurrency wallets. Tracking cryptocurrency investments is considered easier than traditional cash due to blockchain technology, which records the entire transaction history transparently and immutably.
Bank withdrawal records and other forensic investigation measures can also assist in determining the origin of cryptocurrency assets. The parties involved may choose to withdraw cash from the cryptocurrency before division or directly divide the tokens.
The increasing trend of using cryptocurrency in the financial sector has led to a rise in divorce cases involving digital assets globally. A typical case is the divorce in New York, where the wife discovered that her soon-to-be ex-husband had hidden 12 Bitcoins, worth around $500,000, in a secret cryptocurrency wallet.
