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Married couples in South Korea can now officially divide their cryptocurrency holdings during divorce proceedings. This marks a big shift in how digital assets are treated within the country's legal framework.
A South Korean law firm specializing in divorce law, IPG Legal, has clarified the regulations surrounding cryptocurrencies, confirming that they can be recognized as marital assets.
Under the provisions of South Korean law, spouses are entitled to claim not only tangible assets but also intangible ones, including cryptocurrency and Bitcoin. Article 839-2 of the Korean Civil Act allows either spouse to request a division of marital assets that have been accumulated during the marriage.
This development follows a landmark ruling by the Supreme Court of South Korea in 2018, which established that cryptocurrencies and other virtual assets should be classified as property due to their inherent economic value.
As a result of this legal clarification, any cryptocurrencies acquired during the marriage are now considered part of the marital estate. This means that spouses who are aware of their partner's cryptocurrency exchange wallets can seek legal intervention to conduct a "fact-finding investigation" to determine the value of their holdings. This is a crucial step in ensuring that both parties receive a fair share of the marital assets.
One advantage of tracking cryptocurrency investments is the transparency offered by blockchain technology. Each transaction is recorded and preserved on the blockchain, making it more straightforward to trace and verify ownership than traditional cash.
In addition, bank withdrawal records and forensic investigations can uncover unknown sources of crypto holdings, ensuring that all assets are accounted for during divorce proceedings.
The ability to divide cryptocurrency in divorce settlements presents various options for couples. Partners may choose to cash out the crypto holdings before dividing them, allowing for a more straightforward financial settlement. Alternatively, they can directly share the tokens, allowing both parties to retain an interest in their digital assets. This flexibility can lead to more amicable resolutions, as couples navigate the complexities of their financial arrangements during separation.
This legal recognition of cryptocurrency as a marital asset aligns with a broader global trend, where many jurisdictions are beginning to grapple with how to categorize digital assets in divorce settlements. As cryptocurrencies gain popularity and economic significance, legal frameworks must adapt to reflect these changes, providing clearer guidelines for asset division.
With the rise of digital currencies, this legal development in South Korea is particularly timely. It addresses the growing prevalence of cryptocurrencies among the general public, offering a fair and structured approach to resolving disputes over these often complex and valuable assets during divorce.
Overall, this shift in South Korean divorce law not only acknowledges the economic value of cryptocurrencies but also ensures that both spouses have a fair opportunity to claim their share of marital assets, regardless of their form.
