Today, I saw an article on "Wu Shuo Blockchain", a well-known self-media public account in the circle, titled "Rare Case: Domestic couples divorce and divide their property. Huobi freezes it as required by the court. Are cryptocurrencies protected by law during divorce?" "The article has aroused heated discussion among many friends in the circle. Below, the author will analyze the legal issues of cryptocurrency in divorce cases.
Case Overview
The contributor of the above article found that his Huobi account and bank card were frozen in June 2021. The reason for the freezing was that his wife filed for divorce and applied for property preservation. The court of first instance found that the relationship between the couple had broken down and ordered the defendant to convert the 10.69 BTC in his Huobi account into RMB according to the price at the time of freezing for property division.
Analysis of relevant legal issues
1. Can crypto assets such as BTC and ETH be divided as joint property of husband and wife during divorce proceedings?
In order to understand whether cryptocurrencies such as BTC can be divided as joint property between husband and wife in divorce cases, it is first necessary to clarify whether BTC is property in the legal sense.
Property in the legal sense needs to have economic value, a certain degree of scarcity and disposability. Bitcoin is a block reward obtained through mining, which requires the purchase of mining machines and consumes a large amount of electricity. Its economic value is self-evident; its total amount is constant at 21 million, which has a certain degree of scarcity; currency holders can use the chain to The wallet address and corresponding private key mnemonic phrase exclusively possess and control Bitcoin, so BTC has property attributes in a legal sense. Article 127 of the Civil Code stipulates that if the law has provisions on the protection of data and network virtual property, those provisions shall prevail.
Although Bitcoin is not a currency in the true sense, and its trading behavior is not encouraged by regulatory policies in China, and investors need to bear their own risks, as a virtual commodity, it should be subject to legal sanctions as long as it does not violate prohibitive provisions such as laws and regulations. Protect.
Article 1062 of the Civil Code clearly stipulates the common property of husband and wife: The following properties acquired by husband and wife during the marriage relationship are the joint property of husband and wife and shall be owned jointly by husband and wife:
(1) Wages, bonuses, and labor remuneration;
(2) Income from production, operation, and investment;
(3) Income from intellectual property rights;
(4) Property inherited or donated, except as provided for in Paragraph 3 of Article 1063 of this Law;
(5) Other property that should be jointly owned.
Husband and wife have equal rights to handle joint property.
In this case, during the marriage, the property obtained by the defendant from investing in Bitcoin transactions through a Huobi registered account should be considered joint property of the couple.
2. Under what circumstances will a divorce be decreed for the first time?
The defendant (contributor) in this case believed that when the divorce was filed for the first time, the divorce should not be awarded if there was no fault of the party.
Article 1079 of the Civil Code stipulates that the court shall conduct mediation when hearing a divorce case. If the relationship has truly broken down and mediation is ineffective, the court shall grant divorce. Therefore, the key point that the court examines in divorce cases is whether the relationship between the husband and wife has indeed broken down, and if one of the following circumstances stipulates in Article 1079, paragraph 3, that mediation is ineffective, divorce shall be granted:
(1) Bigamy or cohabitation with others;
(2) Committing domestic violence or abusing or abandoning family members;
(3) Have bad habits such as gambling and drug abuse and refuse to change despite repeated admonitions;
(4) Separated for more than two years due to emotional discord;
(5) Other circumstances that lead to the breakdown of the relationship between husband and wife.
If one party is declared missing and the other party files for divorce, the divorce shall be granted.
After the people's court has ruled that divorce is not allowed, and the two parties have been separated for more than one year, and one party files a divorce lawsuit again,
Divorce should be granted.
Therefore, during the review of a divorce case, the judge can decide to grant divorce if the evidence provided by the parties can be used to prove that the relationship between the couple has indeed broken down. However, in many divorce cases, the parties concerned are unable to provide evidence to prove that the divorce conditions stipulated in Article 1079, paragraph 3, of the Civil Code have been met. Therefore, in many cases, the court will not grant divorce when the divorce is filed for the first time.
3. Can cryptocurrencies such as BTC be frozen in civil cases?
Currently, many criminal gangs use cryptocurrency as a tool to transfer criminal property due to its decentralization and anonymity. In order to combat crime and help victims recover losses, domestic and foreign judicial authorities will send judicial documents to relevant companies to freeze the USDT in cryptocurrency exchange accounts and on-chain addresses involved in criminal cases.
For civil cases, Article 103 of the Civil Procedure Law stipulates that in cases where the conduct of one of the parties or other reasons may make it difficult to execute the judgment or cause other damage to the parties, the court may take preservation measures based on the application of the parties or ex officio when necessary. measure. Article 105 stipulates that preservation is limited to the scope of the request or property related to the case.
In this case, the bitcoins in the defendant’s Huobi account were used as virtual property and were the joint property of the husband and wife in the divorce case. According to the provisions of the Civil Procedure Law, after the plaintiff applies and the court issues legal and compliant judicial documents to the exchange Huobi, the Bitcoin in the account should be frozen. In previous cases that the author assisted in handling, when freezing exchange accounts, it was considered that the accounts may contain non-stable currencies such as Bitcoin and Ethereum, and may even have contract positions. Therefore, in the process of judicial practice, freezing is generally required. With the currency withdrawal permission of the account, the frozen user's trading behavior can proceed normally.
4. How to find clues about cryptocurrency property in divorce cases?
For divorce cases involving cryptocurrency, the parties lack the professional investigative capabilities of the public security organs in criminal cases, making it difficult to find property clues related to the case. Therefore, there are relatively few domestic cases of dividing cryptocurrency in divorce cases.
The author’s thoughts on finding clues to crypto assets in divorce cases are as follows:
1. Pay attention to whether exchange software such as Binance, Huobi, and OKX are used on mobile phones and computers. During divorce proceedings, you can apply to the court to preserve the exchange account;
2. Pay more attention to hardware wallets and notes with mnemonic phrases at home;
3. For the on-chain address in the notepad, you can seek professionals to search for property clues through on-chain traceability;
Outlook and Summary
With the birth of Bitcoin, blockchain technology has gradually entered people's field of vision. Its traceability, openness and transparency have given the traditional financial industry tremendous creativity. As the product of this technology, crypto assets such as Bitcoin are definitely not a scourge. We hope that in the near future, relevant regulatory authorities will introduce more regulatory policies to align judicial decisions with regulatory policies and ensure citizens’ judicial relief for crypto assets. ability.
