Editor of this issue | Colin Wu
Preface: The division of cryptocurrencies in divorce cases has received more attention. Since cryptocurrencies are not legally protected in China, the following case is more typical and specific.
The following is the author's statement:
In June 2021, it was discovered that the Huobi account could not be logged in, and then the bank card was also frozen. It was later discovered that it was because the wife sued for divorce and applied for property preservation. She knows that I have assets in Huobi. It should be that after finding out that Huobi can be frozen, they suddenly sued for trying to divide up the property. I was also very surprised, because I didn't expect Huobi to cooperate with the judicial process so much. My Alipay and WeChat were not frozen (the other party also applied, but Tencent and Alibaba did not cooperate). The assets frozen at that time were worth about 10 BTC(the price of BTC at that time was about 3w-4w US dollars). During the period, I contacted Huobi to try to apply for unblocking the account, but Huobi gave a template reply every time. I have no choice but to finish the lawsuit as soon as possible.
Under normal circumstances, the first divorce lawsuit should not be awarded if there is no fault party. But the result of the first trial surprised me. In the case of no fault party, the judge subjectively believed that our relationship had broken down and divided the property 50-50. What surprised me even more was that the virtual currency in my Huobi account, the judge actually According to the estimated value given by Huobi, it is directly judged as RMB, and let me deliver half of it to the other party. I have not sold these coins yet, the case has reached the enforcement stage, and I am preparing for an appeal.
Q: What is the specific freezing method?
Answer: I received an email notification from Huobi, and I couldn’t log in to my account, and I was still running grid trading at that time. pause.
Q: Have you tried to communicate with customer service to solve the problem?
Answer: I tried to communicate that this kind of civil case should not be frozen, but the customer service always responded with an email template, asking me to find the court enforcement bureau, which is to continue the lawsuit. Therefore, although Huobi cleared mainland users, my account has been frozen like that.
The reason why this case is relatively rare is that China prohibits relevant financial institutions from setting prices for illegal virtual currencies, and at the same time does not recognize their prices, and there is no institution in the society that recognizes prices for virtual currencies. The value of the virtual currency involved in this case was neither made by the legal institution involved in value evaluation nor by a judicial appraisal institution.
Previously, there were related cases where judgments pointed out that virtual currency-related business is an illegal financial activity. Any legal person, unincorporated organization or natural person who invests in virtual currency and related Derivatives violates public order and good customs, the relevant civil legal act is invalid, and the losses caused by it shall be borne by him/herself. bear.
Generally speaking, there are currently few domestic cases on the division of encrypted assets in divorce cases, because there are problems such as difficulty in obtaining evidence, difficulty in valuation, and difficulty in enforcement. Among them, the difficulty of obtaining evidence includes the difficulty of proving that the spouse holds cryptocurrency, and the difficulty of proving that cryptocurrency belongs to the joint property of the husband and wife. At present, the legal status of cryptocurrencies is not protected by law in China, so it is difficult to obtain legal protection in many civil lawsuits. Judgments in this case are relatively rare.
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However, similar cases abroad are relatively abundant. For example, in 2013, Francis, a man in San Francisco, failed to disclose his bitcoin investment when he divorced his wife. After three years of divorce proceedings, the San Francisco court ruled that Francis should He was punished by distributing more than $6 million in Bitcoin to his ex-wife.
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In addition, some law firms in the UK have also handled divorce cases with encrypted assets as the main assets, involving Bitcoin, Litecoin, Ripple and Ethereum. At the time of divorce, the lawyer will ask both parties to fill in the encrypted assets on a document called Form E, and will also analyze their bank statements, tax records, etc. to determine whether there is any undisclosed behavior. If a crypto asset cannot be found in a lawsuit, but there is evidence of crypto market activity, the court is empowered to draw an adverse inference that the asset does exist.
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In most Western countries (including Canada, most of the United States, and Europe), cryptocurrencies are considered community or family property. Even if spouses hold assets in their own names, cryptocurrencies still need to be split. Some states in the United States, such as Pennsylvania and Idaho, practice equitable distribution. Courts divide matrimonial property and debts based on equitable principles and by analyzing various factors.
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