Cryptocurrency has become very popular with Texans in recent years. Many individuals have increasingly added cryptocurrency to their wealth portfolios. If you are getting a divorce, you may be wondering. “How is cryptocurrency divided in a Texas divorce?” The answer depends upon when the cryptocurrency assets were acquired, how they were managed during your marriage, and whether they are community property or separate property.
Why Choose The Law Office of Ben Carrasco, PLLC?
The Law Office of Ben Carrasco, PLLC, exclusively practices family law in Central Texas. We handle complex divorce and custody battles ranging from high-net-worth business owners to cryptocurrency. Our founding attorney, Ben Carrasco, is board-certified in family law and educated at Stanford. We represent clients in Travis County, Williamson County, Hays County, and the neighboring areas.
Why Cryptocurrency May Create Challenges
Cryptocurrency is a digital or virtual currency that is almost impossible to counterfeit because it is protected by encryption. It operates on a decentralized peer-to-peer network and is mostly used for borderless internet trading, investments, and transactions. It is not dependent on governments or central banks.
According to a 2026 Pew Research Center survey, 19% of Americans say they have used, traded, or invested in cryptocurrencies. Cryptocurrency is becoming more significant in high-asset divorce proceedings as usage increases to 27% among upper-class households.
Cryptocurrencies are typically held in digital wallets, which aren’t always obvious on financial disclosures. You can buy cryptocurrency on centralized exchanges or keep it in private wallets that only you control.
This means that, when it comes time to divide property during a divorce, one spouse may not even be aware that cryptocurrency exists. Even if the existence of cryptocurrency is revealed, one spouse may not understand the value of the holdings or how to determine if transactions were made during the marriage.
Many Texas employees invest in cryptocurrency as part of their overall financial planning. When going through a divorce, cryptocurrency may need to be addressed, along with other marital assets.
Texas Community Property Divorce Laws and Cryptocurrency
Texas is a community property state. Texas Family Code § 3.002 defines community property as assets acquired by either spouse during the marriage, except where an exception applies. Simply put, if cryptocurrency was purchased during the marriage, it is presumed to be community property, even if it is only in one spouse’s name.
Texas Family Code § 7.001 states that marital property should be divided in a way that the court deems just and right. During this process, courts have the discretion to consider factors such as:
- Fault in the breakup of the marriage
- Separate property owned by one spouse
- Earning capacity
- Child custody
This means that property division may not always be an even split, especially if the courts believe that an alternative outcome would be fair.
Determining Whether Cryptocurrency Is Separate Property
Separate property is not divided during divorce. A spouse can attempt to assert that cryptocurrency investments are separate property if they can prove that the assets were:
- Owned prior to the marriage.
- Given as a gift or inheritance.
- Purchased primarily with funds that would be considered separate property.
With cryptocurrency, it can be difficult to prove that it is separate property. Cryptocurrency is often transferred between dozens of wallets and exchanges. For instance, if one spouse purchased Bitcoin before the marriage but used marital property later to continue funding it, this can present complexities in tracing what would be considered separate and what would be considered marital. A Texas property division attorney can help with these complexities.
Local Considerations for a Texas Cryptocurrency Division Case
Divorce cases with cryptocurrency disputes are common throughout Central Texas. The Austin metro area and its surrounding areas, such as Williamson County and Hays County, are home to many technology companies, startups, venture-backed companies, and investors who hold cryptocurrency.
Cases involving Austin residents are typically filed in the Travis County Civil and Family Courts Facility at 1700 Guadalupe Street, Austin, TX 78701. Cases may also be filed in nearby Williamson or Hays County if the parties live in those counties.
FAQs
Can Cryptocurrency Affect Spousal Maintenance in Texas?
Yes, cryptocurrency can affect spousal maintenance in Texas, as it can be included when evaluating both spouses’ financial standing and contributions. Should your spouse own significant crypto that is used to either pay dividends or can be readily converted to cash to provide income, those investments may have a part in any negotiations relating to spousal support. Family courts usually look at the overall financial situation that each individual faces.
What Happens If Cryptocurrency Loses Value After a Divorce Is Finalized?
If cryptocurrency loses value after a divorce is finalized, the parties still must take their share of the assets as is, meaning they assume the risk of any potential increases or decreases in value. For example, if cryptocurrency substantially declines in value after the divorce, the party who received it generally cannot go back to court to make a claim against their ex for the lost value due to a decrease in the market.
Can a Spouse Keep Cryptocurrency in an Overseas Exchange?
Cryptocurrency stored in an exchange located outside the U.S. is not necessarily exempt from division in a Texas divorce. The digital currency may still be taken into consideration by the court when dividing assets. If the exchange is in another country, there may be additional legal issues, such as obtaining documentation, account information, and valuations. It is still necessary to disclose cryptocurrency assets, even if they are stored on a foreign exchange.
Can Cryptocurrency Be Considered When Negotiating a Child Custody Settlement?
Cryptocurrency can be considered when negotiating a child custody settlement, but it doesn’t automatically dictate custody. If you own substantial crypto assets, they could be considered if they:
- Impact your ability to financially support your child.
- Change your economic situation.
Disclosure of financial information is common in family law cases, even if custody is the main issue being discussed.
Hire a Property Division Lawyer at The Law Office of Ben Carrasco, PLLC, Today
Cryptocurrency gets divided like any other property in Texas. However, cryptocurrency presents unique issues with identification, valuation, tracing, and disclosure. Determining whether it is community vs. separate property depends on the facts of how the cryptocurrency was acquired and maintained during the marriage. When you hire a property division lawyer, they can determine the value of cryptocurrency in your divorce. Contact us today for more information.
