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 like Bitcoin (BTC) can be included in the marital estate, allowing couples to divide them upon separation.

Digital Assets Considered Property in South Korea

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

The clarification stems from a 2018 Supreme Court decision that officially categorized virtual assets as property due to their economic value. It gives divorcing couples the option to request a court-ordered investigation to determine their partner’s crypto holdings, allowing for the 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-world identity may not be directly attached to their on-chain addresses, transactions they make are still traceable.

Options for Dividing Cryptocurrency

In his post, Hayes, who is the first non-Korean working in the country’s court system, said that if a spouse knows what crypto exchange their partner used for such transactions, they could petition the court to obtain records from the platform to ascertain the amount of digital assets held.

Conversely, if a partner has no idea what crypto exchange their better half used to acquire their crypto, they could still use the court to institute forensic on-chain investigations in combination with bank records to uncover undisclosed digital assets.

In line with the law, Korean couples have two primary options for dividing cryptocurrency: they can either cash out their holdings or split the tokens directly.

The Asian country’s move to include cryptocurrencies in the division of marital assets mirrors its broader focus on transparency. In December 2023, it introduced legislation requiring high-ranking public officials to start disclosing their crypto holdings as of June 2024.

This mandate came in the wake of a scandal in May 2023, where a senior political figure in the country was alleged 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 information misuse, and even possible money laundering.

Source : CryptoPotato - Oct 11, 2024