What Happens to Crypto in a Divorce in South Korea?
By TH3FUS3 Editorial Staff
October 10, 2024 12:00 PM
Reading time: 1 minute, 29 seconds
TL;DR South Korea now allows the division of cryptocurrency holdings in divorce cases. This change aligns virtual assets with tangible properties under the Korean Civil Act. The 2018 Supreme Court ruling solidified cryptocurrencies as part of marital estates.
A New Chapter in Divorce Proceedings
Married couples in South Korea now face a groundbreaking change in divorce law. According to IPG Legal, a law firm with expertise in Korean legal matters, cryptocurrency holdings can be divided during divorce proceedings. This shift comes as South Korea recognizes both tangible and intangible assets under the Korean Civil Act.
The Legal Framework
The pivotal Article 839-2 of the Korean Civil Act allows spouses to request a division of marital assets accumulated during the marriage, including digital assets like cryptocurrency.
A significant 2018 ruling by South Korea's Supreme Court confirmed the status of cryptocurrencies as property. This classification is due to their economic value as intangible assets.
Cryptocurrency and virtual assets are now part of the Korean marital estate.
Investigating Crypto Assets
Spouses who are aware of their partner's crypto exchange wallets can prompt courts to initiate a "fact-finding investigation." This process helps ascertain the value of cryptocurrency holdings.
Blockchain technology makes tracking crypto investments easier than tracing traditional cash. Blockchain preserves all transactions and prevents modifications or deletions.
Beyond South Korea: A Global Trend
The growing role of cryptocurrency in personal finance has led to increased divorce cases involving digital assets worldwide.
A notable case from New York highlighted this trend. During divorce proceedings, a wife uncovered her husband's undisclosed Bitcoin holdings valued at around $500,000. This discovery was made possible with the help of a forensic accountant.
Options for Division
Couples have two main options when dividing cryptocurrency holdings. They can cash out the assets before splitting them. Alternatively, they can choose to share the tokens directly. This flexibility gives couples more control over their financial outcomes during a divorce.
This change in South Korean law reflects a broader shift in how digital assets are integrated into legal systems worldwide.
