South Korea Allows Division of Cryptocurrency in Divorce Cases

Dividing Cryptocurrency Holdings in South Korean Divorces

In recent developments, married couples in South Korea can now divide their cryptocurrency assets during divorce proceedings. This significant update was clarified by IPG Legal, a prominent South Korean law firm.

Legal Framework for Crypto Division

According to the South Korean law, both tangible and intangible assets—including cryptocurrencies—are eligible for division during divorce. This is aligned with Article 839-2 of the Korean Civil Act, which allows either spouse to request the division of marital assets accumulated during the marriage.

Previously, in a landmark 2018 ruling, South Korea’s Supreme Court established that cryptocurrencies are considered property due to their inherent economic value as intangible assets. This legal precedent is crucial for spouses seeking to equitably divide their assets, ensuring that digital currencies are treated similarly to traditional assets.

Assessing Cryptocurrency Value

For spouses who are aware of their partner’s crypto holdings, South Korean courts can facilitate a fact-finding investigation to determine the current value of these assets. This process is notably streamlined compared to traditional cash assets.

The blockchain technology underlying cryptocurrencies ensures that all transactions are immutable and transparent, providing a clear record of asset accumulation. This feature allows for precise tracking of investments.

Strategies for Dividing Crypto Assets

In cases where spouses can identify their partner's crypto exchange wallets, they have two primary options for dividing these assets:

• Cashing Out: Couples may decide to liquidate the cryptocurrency holdings before proceeding with the division, translating the digital assets into cash for easier distribution.
• Direct Sharing: Alternatively, spouses may opt to directly share the cryptocurrency tokens, maintaining their value in the form of digital assets.

Conclusion

The acknowledgment of cryptocurrencies as part of the marital estate marks a pivotal shift in South Korean divorce law. As digital currencies become increasingly common, the legal framework continues to adapt, providing a pathway for equitable division during divorce proceedings.

This evolution in legal interpretation not only reflects the changing landscape of asset management but also ensures that all forms of property, including innovative digital assets, are accounted for in marital separations.