Dividing cryptocurrency in a divorce can raise practical questions that do not come up with more traditional assets. Digital coins and tokens can move quickly, values can change rapidly, and ownership details may be spread across apps, exchanges, and private wallets.
In Texas, those details matter because the way property is classified and valued can directly affect what each spouse receives. THE POTTER LAW GROUP (Formerly The Okoh-Brown Law Group, PLLC) in Houston, Texas, provides clear guidance on how digital assets may be valued and divided in a divorce. The firm serves clients throughout Texas, including Houston, Dallas, Fort Worth, San Antonio, El Paso, and beyond.
The more organized you are about records and access, the easier it is to address cryptocurrency in a way that fits your overall property division. Call today for help.
How Cryptocurrency is Treated in a Texas Divorce
Texas is a community property state, which generally means most property either spouse acquires during the marriage may be considered community property, even if only one spouse managed it day to day. Cryptocurrency can fall into that same category, whether it was purchased on an exchange, earned through work, received as a bonus, or acquired through trading during the marriage.
Separate property can also exist, such as crypto owned before marriage or received as a gift or inheritance, but it typically has to be shown with reliable documentation.
Even when both spouses agree that cryptocurrency exists, disagreements often happen over classification, value, access, and timing. Some holdings are easy to confirm, such as assets held in a well-known exchange account, while others are harder to spot, such as coins moved to a private wallet.
Identifying and Tracing Digital Assets
Before cryptocurrency can be divided, it has to be identified and linked to an owner and a time frame. That process can encompass the following:
Exchange and app accounts: Login dashboards, account profiles, and transaction histories can show purchases, sales, transfers, and current balances across specific coins or tokens.
Bank and card records tied to purchases: Statements may show fiat deposits to exchanges, debit card purchases of crypto, recurring buys, or transfers that match exchange activity.
Wallet addresses and on-chain activity: Public blockchain records can support tracing when you have wallet addresses, transaction IDs, and a way to connect the address to one spouse's control.
Tax and accounting documents: Prior filings, gain and loss summaries, and exported transaction reports can help confirm what was traded and when, especially if activity was frequent.
Tracing is often where timing and documentation intersect. If a spouse claims certain coins are separate property, records may need to show that the asset existed before the marriage and remained separate, without being mixed with marital funds in a way that changes its classification. Once the picture of ownership and history is clearer, the next question usually becomes how the cryptocurrency should be valued for division.
Valuing Cryptocurrency for Property Division
Valuation is rarely a single number that everyone automatically accepts, because crypto prices can change quickly, and different platforms may display different values at the same moment. In many cases, spouses and their counsel focus on agreeing on a valuation date or a valuation method that fits the case.
Valuation also has to account for the type of asset involved. A widely traded coin on a major exchange is typically easier to value than a thinly traded token, an asset held in a decentralized finance position, or a coin locked in a staking arrangement. If an asset can't be sold immediately without penalties, that can affect how spouses negotiate division.
Practical Ways Couples Divide Crypto
There isn't only one way to divide cryptocurrency in divorce, and the right approach often depends on access, volatility, and whether either spouse wants to keep the asset long term. Some couples prefer a clean separation with fewer moving parts, while others want to keep positions intact and divide them with direct transfers, and those choices often lead to options like the following:
Direct transfer of coins or tokens: One spouse transfers an agreed amount to the other spouse's wallet or exchange account, which can keep the division tied to the asset itself rather than converting to cash.
Offset with other marital property: One spouse keeps the crypto, and the other spouse receives additional value from other assets, such as cash, equity, or other marital property, to balance the overall division.
Sale and division of proceeds: The crypto is sold, and the net proceeds are divided, which can reduce future price risk but may trigger tax consequences that need to be addressed in the agreement.
Structured division based on specific holdings: Instead of dividing every coin proportionally, spouses may allocate different assets to each spouse to reduce ongoing entanglement, with a balancing payment if values aren't equal.
Execution matters as much as the agreement. The plan should account for wallet setup, security, and confirmation steps so the transfer is verifiable, and it should also address what happens if prices swing between agreement and completion. After the division method is chosen, it's wise to look closely at tax and reporting issues that could change the real, after-tax value of what each spouse receives.
Tax and Compliance Issues That Can Change Outcomes
Cryptocurrency division can carry tax implications, and those implications may differ depending on whether assets are transferred, sold, or exchanged. In general, a transfer between spouses incident to divorce may be treated differently from a sale on the open market, but the details can depend on timing, documentation, and the manner in which the transaction is carried out.
Compliance issues matter, too. If a spouse used multiple exchanges, traded frequently, or participated in activities like staking or decentralized finance, the recordkeeping may be incomplete or inconsistent across platforms. That can affect how confidently both sides can measure gains, losses, and cost basis, which can influence negotiations and settlement terms.
Addressing these issues early can also reduce the risk of disagreements later over missing transactions, disputed values, or account access that becomes difficult after the divorce is finalized.
Contact an experienced family law attorney for support. THE POTTER LAW GROUP (Formerly The Okoh-Brown Law Group, PLLC) serves clients throughout Texas, including Houston, Dallas, Fort Worth, San Antonio, El Paso, and beyond.
Speak to a Divorce Lawyer
If cryptocurrency is part of your marital estate, it's worth getting legal advice before you agree to a split, transfer assets, or sign final paperwork. A divorce lawyer can help you frame the right questions about classification, valuation, documentation, and workable division terms. To discuss your situation in Texas, contact THE POTTER LAW GROUP (Formerly The Okoh-Brown Law Group, PLLC) today.
