South Korea has made it possible for married couples to divide crypto holdings during divorce proceedings.
According to IPG Legal, a law firm specializing in South Korean legal matters, the nation’s law now recognizes both tangible and intangible assets, including cryptocurrencies, as part of marital property.
The firm pointed to Article 839-2 of the Korean Civil Act, which allows either spouse to request the division of assets acquired during marriage upon divorce.
Virtual Assets Classified as Property
The provision applies to digital assets like cryptocurrencies, reinforcing a 2018 ruling by South Korea’s Supreme Court.
The court’s decision classified virtual assets as property, given their economic value as intangible assets.
As a result, cryptocurrencies accumulated during a marriage can be included in the division of the marital estate.
This means that a spouse can request a “fact-finding investigation” through the courts if they suspect their partner holds undisclosed crypto assets.
The investigation aims to determine the value of these holdings, which could impact the division of assets during the divorce.
Cryptocurrency tracking during such proceedings can be more straightforward than tracking traditional cash assets, thanks to blockchain technology.
Blockchain records provide a transparent ledger of transactions, making it difficult for individuals to hide crypto transactions or delete records.
Additionally, bank withdrawal records and forensic analysis can aid in identifying hidden crypto investments.
Couples undergoing divorce can choose to either liquidate the crypto holdings before dividing them or split the tokens directly, depending on their preference and the nature of the assets.
The growing integration of digital assets in financial dealings has led to a rise in divorce cases involving cryptocurrencies globally.
For instance, a recent New York case saw a woman discover her husband’s hidden Bitcoin holdings during their divorce proceedings.
She employed a forensic accountant who uncovered 12 BTC worth around $500,000 stored in an undisclosed wallet.
The revelation highlighted the challenges and surprises that digital assets can bring to divorce settlements, underscoring the need for legal clarity in such cases.
South Koreans Turn to Crypto
A recent survey has revealed that most young South Koreans are losing faith in the national pension system, with many stating they see crypto and stocks as a better alternative.
The study found that more than three-quarters of people aged 20-39 “don’t trust” state-issued pensions.
Over half of respondents who said they were making their own pension plans claimed they were building their retirement funds with stocks and crypto.
Interestingly, even election candidates themselves have exposure to cryptocurrencies, with approximately 7% of them owning digital assets, according to a report by Yonhap that analyzed their asset disclosures.
Just recently, it was reported that South Korea is set to introduce stricter regulations for token listing on exchanges, including the blocking of tokens that have been hacked.
The country’s financial authorities are preparing to release guidelines for virtual asset trading support, expected to be published by the end of this month or early next month.
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