South Korea Allows Cryptocurrency Division in Divorce Proceedings

New Legal Precedent: Division of Cryptocurrency in South Korean Divorces

In a landmark decision, South Korea has established legal clarity regarding the division of cryptocurrency holdings during divorce proceedings. This change allows married couples to equitably distribute assets, including digital currencies, in the event of a separation.

Understanding the Legal Framework

According to Cointelegraph, the law firm IPG Legal has clarified that both tangible and intangible assets, like cryptocurrencies, may be divided in a divorce under South Korean law. This is facilitated by Article 839-2 of the Korean Civil Act, which permits either spouse to request a division of marital assets acquired during the marriage.

The 2018 Supreme Court Ruling

This precedent follows a significant ruling by South Korea's Supreme Court in 2018 that recognized cryptocurrency and virtual assets as properties because of their economic value as intangible assets. As a result, any cryptocurrencies gained during the marriage are now considered part of the marital estate in South Korea.

Asset Discovery and Evaluation

For couples undergoing divorce, especially those with knowledge of their partner’s crypto exchange wallets, courts can initiate a "fact-finding investigation" to assess the true value of these holdings. Blockchain technology plays a pivotal role in this process, as it ensures all transactions are publicly recorded and immutable, thus facilitating asset tracking.

• Blockchain Advantages: Unlike traditional bank transactions, blockchain preserves the entire history of transactions, making it easier to trace cryptocurrency investments.
• Forensic Investigations: Additional resources, such as bank withdrawal records, assist in uncovering previously unknown sources of crypto holdings.

Options for Distribution

During the division process, partners have flexible options on how to handle their crypto holdings. They may choose to either:

1. Cash Out: Convert the cryptocurrency into cash before reaching a settlement.
2. Share Directly: Divide the tokens among themselves without liquidating them.

Implications for Future Divorces

This legal clarification is expected to influence how couples in South Korea approach both marriage and divorce, especially as cryptocurrency continues to integrate into broader financial portfolios. As digital assets become a more common feature of marital wealth, understanding their implications will be crucial for both spouses.

For more information on asset division during divorce, visit IPG Legal