Bitcoin recognized as divisible property in South Korean divorces

South Korea now recognizes cryptocurrency holdings as divisible assets during divorce proceedings.

According to a leading law firm in the country, IPG Legal, cryptocurrencies such as Bitcoin (BTC) can be included in matrimonial property, allowing couples to divide it after separation.

Digital assets are considered property in South Korea

In a blog post on October 10, attorney Sean Hayes stated that under Article 839-2 of the Korean Civil Code, tangible and intangible assets acquired during marriage, including cryptocurrencies, are subject to division.

The clarification comes from a 2018 Supreme Court decision that officially classified virtual assets as property based on their economic value. It gives divorcing couples the option to request a court-ordered investigation to determine their partner’s crypto holdings, allowing for easier tracking of hidden wealth.

Contrary to popular belief, blockchain technology is not anonymous; rather, it is pseudonymous, meaning that while a user’s real identity may not be directly connected to their on-chain addresses, the transactions they make are still traceable.

Options for splitting cryptocurrency

In his post, Hayes, who is the first non-Korean to serve in the country’s court system, said that if a spouse knows which crypto exchange their partner used for those transactions, they could ask the court to obtain records of the platform to check the amount of digital assets held.

Conversely, if a partner has no idea which crypto exchange their better half used to acquire their crypto, they could still use the court to initiate chain forensics in combination with bank records to uncover undisclosed digital assets.

According to the law, Korean couples have two main options for splitting the cryptocurrency: they can withdraw their holdings or split the chips directly.

The Asian country’s decision to include cryptocurrencies in the division of marital assets reflects its broader focus on transparency. In December 2023, he introduced legislation that required high-ranking public officials to begin disclosing their crypto holdings starting in June 2024.

This mandate came in the wake of a scandal in May 2023 where a senior political figure in the country was said to have hidden $4.5 million worth of Wemix, the native token of the Korean blockchain project Wemade.

It raised questions about potential conflicts of interest, insider trading and even possible money laundering.

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