How to divide Ningbo Bitcoin divorce

After confirming that Bitcoin is the joint property of husband and wife, how to divide it during divorce? The conclusion starts with the following: since bitcoin and other virtual currencies do not have legal tender status and transactions are strictly restricted, it is difficult to directly "transfer and split". In practice, discount is mainly negotiated-one party holds it and compensates the other party according to the market value at the agreed time point, or confirms its share according to the proportion of joint acquisition. If negotiation fails, the court shall decide the compensation with reference to the acquisition cost and present value. The Ningbo courts have included virtual currency within the scope of property division in family law cases. The primary challenge in such divisions lies not in whether it can be divided, but rather in how to value it and how to convert it into cash.

1. legal characterization: Is Bitcoin property? Can it be divided?

One premise needs to be clarified first: Bitcoin does not have the legal currency status in our country. In September 2021, the People's Bank of China and other ten departments ''Notice on Further Preventing and Disposing of Virtual Currency Transaction Speculation Risks'' clarified that virtual currency-related business activities are illegal financial activities, and overseas virtual currency exchanges provide services to domestic residents through the Internet. Financial activities; but the notice also confirmed that there are legal risks in participating in virtual currency investment and trading activities, and it is not of course illegal for individuals to hold and keep Bitcoin within the policy framework. In judicial practice, the mainstream judgment caliber identifies virtual currencies such as Bitcoin as network virtual property protected by law-Article 127 of the Civil Code stipulates that the law provides for the protection of network virtual property in accordance with its provisions, the court may deal with its ownership and division.

Therefore, the logical framework for characterizing the division of Bitcoin in divorce cases is: Legitimate holding, recognized property attributes, but limited realization of transactions. The division is mainly based on negotiated discount, which may be agreed to be held by one party and compensated to the other party at present value, or to confirm the share in proportion to the joint acquisition ".

2. Scenario Breakdown and Valuation Methods

1. Jointly financed purchase within marriage: Bitcoin and the income belong to common property, which is treated as common property in the event of divorce, usually held by one party and compensated at a market value discount at the agreed time point.
2. One party holds before marriage and increases in value during marriage: the currency itself belongs to the property before marriage, but whether the income generated by holding in marriage belongs to the common property depends on whether it is put into joint operation and active management; generally, it is judged by referring to the rule of "personal property after marriage income", and compensation can be paid for the value-added part during negotiation.
3. Mining with family funds or trading through overseas platforms: The family capital invested belongs to the common property, and the corresponding output currency or equity shall be treated according to the input proportion; the mining equipment and electricity input shall be treated according to the physical objects and expenses.
4. One party conceals and refuses to disclose wallets and accounts: The other party may present evidence, such as exchange account records, deposit and withdrawal records, and chat logs; in cases of concealment or transfer of assets, the provisions of Article 1092 of the Civil Code may be invoked to seek a smaller share or no share. The court may order the party to make a truthful declaration and clarify the consequences of concealing assets.
5. The two sides have great differences on the expectation of currency price rise and fall: it can be agreed to be priced at the market value of a certain point (such as the average price of N days before the date of prosecution, the date of agreement or the date of delivery), and written into the agreement and set up installment and default clauses to reduce the execution risk.

Valuation reference four elements: market value of the trading platform (overseas compliance platform market), acquisition cost, holding quantity and acquisition point, and pricing point recognized by both parties. If the value is controversial, you can apply for a reference opinion from a professional institution in the lawsuit on the amount of holdings and the market value of the point in time; it should be noted that the trading of domestic platforms is limited, and the so-called "realized value" should be based on the caliber of disposal recognized by both parties or achievable by legal means.

3. Analysis of Common Misconceptions

Myth 1: Bitcoin is not legal tender, the court doesn't care. Positive solution: Bitcoin does not have the status of legal currency, but its property as a network virtual property is protected by law, and it can still deal with ownership and compensation in the event of divorce.

Misunderstanding 2: You can decide to directly transfer half of the currency to the other party. Positive solution: Due to the limitation of platform and cashing, it is difficult to divide directly. In practice, one party holds and compensates at a discount, and the court generally does not force the disposal of accounts.

Myth 3: The discount is calculated according to the price quoted by the other party.Correct answer: The reference acquisition cost, the current market value of the platform, and the quantity held should be considered. The parties may agree on the valuation date; in cases of dispute, the court shall determine it at its discretion or solicit a professional opinion.

Myth 4: Transfer the coins and destroy the keys.Correct answer: If the concealment or transfer of virtual assets is verified, Article 1092 of the Civil Code may be invoked to award the offending party a smaller share or no share of the estate; furthermore, destruction of cryptographic keys resulting in the loss of assets may also give rise to liability for damages.

4. Practical aspects of proving, investigating, and preserving virtual assets

Virtual assets such as Bitcoin are “invisible and intangible”; the first step in a division of assets is for the court to be convinced that they exist. Available sources of evidence include: the exchange’s registered email address and real-name verification records, bank transaction records for deposits and withdrawals (corresponding to the times of cryptocurrency buying and selling), wallet addresses (traceable through transaction records), mining equipment and electricity bill records, as well as chat logs in which both parties have acknowledged their respective holdings. The evidence list suggests: screenshots of accounts and wallet addresses (including timestamps), trading platform statements, bank entries and exits, time-point records of holdings (recommended for notarization), and communication records between the two parties on the quantity and attribution of coins.

The practical operation space of preservation and investigation is limited but not without: domestic account funds can be frozen; for the assets of overseas exchanges, it is difficult for the court to freeze directly, but through behavior preservation, the parties can be ordered not to dispose of relevant assets, truthfully declare the holding situation, and explain the adverse consequences of violating the reporting obligation. If the other party refuses to declare or conceals the transfer, the other party shall apply to the court for confirmation of bank running water and chat records based on clues. After verification, it may claim that it has less points or no points in accordance with Article 1092 of the Civil Code. Under the property-declaration system for divorce litigation implemented by the Yinzhou District People’s Court in Ningbo, leads regarding the concealment of virtual assets will be subject to rigorous scrutiny during the proceedings.

5. policy boundaries and risk tips

It is necessary to distinguish "property division" from "illegal transaction": in 2021, the ten departments notice forbids the virtual currency related business activities (issuance financing, exchange, buying and selling matching, token issuance, etc.) to be carried out in China. The division of the rights and interests of the existing property when individuals hold, keep and divorce belongs to the handling of the existing property relationship, and the court does not refuse to accept it for this reason; however, the division and realization should be through legal channels, and do not participate in domestic illegal platform transactions or over-the-counter matchmaking for the purpose of discount compensation, so as to avoid the invalidity of the transaction itself or administrative penalties. In terms of valuation, the inability to trade directly in China does not mean that there is no value, and the court usually determines the discount benchmark by reference to the overseas open market, the acquisition cost and the caliber approved by both parties.

There are two other risk tips: first, the "factual loss" caused by key loss and wallet oblivion is difficult to remedy, and the holder should truthfully disclose the custody method; second, the party advocating division must not transfer the other party's wallet assets without permission, otherwise it may be suspected of embezzlement, theft and other criminal risks, and the rights protection should be carried out through litigation and preservation procedures. On the whole, the realistic path of Bitcoin segmentation is "recognition of property attributes, negotiated discount and evidence preservation", and it is not realistic to expect the court to directly order the conversion of coins.

Terms Design and Dispute Resolution Path of 6. Split Agreement

Bitcoin scaling should prioritize consensus, and the design of protocol terms directly affects its enforceability. A relatively complete clause can contain six items: first, the holding arrangement-specify which party holds the currency and the corresponding account and wallet, and the other party gives up the corresponding rights; Second, the pricing point-specify the closing market value of a trading platform (or a standard mutually approved by both parties) on a certain day of a certain year; Third, the discount amount and payment-specify the total amount payable, payment period and installment arrangement; fourth, data transfer-wallet private key, mnemonic word, exchange account number transfer method and time, clear custody responsibility before transfer; Fifth, the breach clause-late payment, refusal to hand over the breach of contract liability; Sixth, the disclosure clause-both parties confirm that they have truthfully disclosed the virtual assets under their names, and those concealed shall be handled according to article 1092 of the civil code. The example can be expressed as follows: "Both parties confirm that there are a total of x bitcoins under their names (see annex for wallet address), all of which are held by Party A; According to the total discount amount of x yuan converted from the market value of the platform, Party A shall pay x yuan to Party B before x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x."

The litigation path that cannot be negotiated: in the divorce litigation, the division is requested together, and the cause of action is not established separately; when the court tries the case, it first fixes the facts (account, running water, self-admission), then determines the pricing standard, and finally makes a discount judgment. For a party who refuses to cooperate, he may apply to the court to order him to submit his wallet and transaction records, and if he refuses to submit it, he may bear the adverse consequences; if he refuses to pay the discount after the judgment takes effect, he may apply for enforcement of other property under his name. On the issue of "the difference between the point of judgment and the point of performance caused by the fluctuation of the currency price", the judgment may be made clear that the conversion amount determined by the judgment shall prevail, and shall not fluctuate with the market, so as to reduce the enforcement dispute. The overall strategy is “negotiate if possible, and promptly file a lawsuit if negotiations fail”; the longer the delay, the more difficult it becomes to gather evidence and preserve it.

The common methods and discovery paths of hidden coins are worth knowing: scattered multi-wallet and small-amount holding, offline storage with cold wallet, deposit and withdrawal of coins through overseas exchange, and inviting relatives and friends to hold coins on their behalf (operating with other people's real-name accounts) are the four main ways. The corresponding discovery clues include: frequent overseas exchange deposit and withdrawal records in the bank flow (abnormal recharge and withdrawal amount and frequency), self-identification of wallet address and holdings mentioned in chat records, and traces of financial transactions in accounts held by relatives and friends. One of the spouses may apply to the court for access to the bank flow and ask the other party to explain the whereabouts of the large amount of funds, and the refusal to explain shall be judged by the court in combination with other evidence. Another reminder: Bitcoin transfer between individuals is not of course invalid in our country, but token issuance financing, transaction matching and other business activities carried out through domestic institutions or platforms are illegal financial activities-divorce division is the disposition of existing property and does not involve illegal transactions, but the realization path should choose compliance channels to avoid turning "dividing property" into "stepping on the red line".

For sharp price fluctuations, the agreement can add "lock and rebalance" clause: agree to lock the total discount based on the average price of several trading days before the signing date or delivery date, and agree on the adjustment mechanism under extreme market conditions (if the currency price rises or falls by more than 50% from the benchmark date, both parties can negotiate to renegotiate the price or adjust the payment quantity according to the original proportion) to avoid one party refusing to perform due to drastic market changes. In the lawsuit, if the two parties have too much difference on valuation, they can apply for an intermediary institution or evaluation institution with corresponding ability to issue a value reference opinion with reference to the historical market situation of overseas compliance trading platforms as the basis for the court's discretion-note that the institution and caliber of issuing the opinion should be approved by both parties or entrusted by the court, and the opinion entrusted by the unilateral party has limited proof force. Only when the pricing, execution, and adjustment mechanisms are fully fleshed out can the division of virtual currency truly be said to have “taken root.”

The effectiveness of disposing virtual assets without authorization during marriage is also worth noting: one party gives a large amount of virtual currency such as bitcoins held jointly to others without the consent of the other party during the existence of the marriage relationship, and the other party can claim that the donation is invalid and demand for return (involving the unauthorized disposal of common property and the situation of violating public order and good customs); one party transfers the currency to the relatives' account for concealment, the other party may apply in divorce proceedings to investigate the flow of funds and claim recovery. The disposition of virtual assets has few traces and strong concealment. It is much more effective to fix the transfer time and address evidence as soon as the clues are found than to guess afterwards.

If virtual assets originate from "mining", pay attention to distinguish equipment and output when dividing: hardware such as mining machines belongs to physical property, which is divided according to common property discount; the cost of electricity and site consumed by mining corresponds to the currency of output to calculate the net income. If family funds are invested in mining within marriage, the output and equipment will be included in the scope of division, avoiding only the currency and no cost, or just count inputs, not outputs.

7. FAQ

Can Bitcoin be distributed directly to each other in half?

Due to platform and monetization constraints, direct division is difficult; typically, one party holds the asset and provides discounted compensation based on its market value at agreed-upon intervals, or shares are allocated according to the proportion of joint acquisition.

At what price is the discount?

Negotiate with reference to the acquisition cost, the present value of the trading platform and the quantity held; a stalemate may agree to be valued at market value at a certain point in time, or at the discretion of the court with reference to the acquisition cost and the present value.

What if the other party doesn't cooperate with the hidden coins?

According to the account of the exchange, recharge and withdrawal records and chat clues, apply to the court to order them to declare truthfully; if the concealment and transfer are verified, they can claim less points or no points.

Is it valid for me to hold and compensate the other party?

Effective. It is recommended to write down the quantity held, the point of valuation, the amount of compensation and the term of payment, and set up installments and default clauses to retain vouchers.

Will the court order to directly transfer half of the currency to the other party?

Generally, a direct order to convert currency is not issued. Subject to platform and liquidity restrictions, in practice, multiple orders or causes a party to hold, according to the agreed point of market value discount compensation.

Practical experience of 8. lawyers

It is a prerequisite that virtual currencies such as Bitcoin cannot be used as legal tender; but it is usually not illegal for individuals to hold them within the framework of the policy, and their property attributes are recognized in practice. Therefore, if it can be divided during divorce, the answer is that it can be divided. The difficult thing is how to value it and how to realize it. Because transactions are subject to strict restrictions, directly transferring half of the cryptocurrency or forcibly liquidating the account is usually not feasible. In practice, it is more common for one party to hold the assets and provide the other party with a discounted compensation based on the market value at an agreed-upon time. If you sort out this characterization, you won't be biased by the claim that this thing is illegal and doesn't need to be classified.

The key is to find out the coins and calculate them clearly. You have to fix the facts held by the other party first: exchange accounts, top-up withdrawal records, wallet address clues, chat about the content of coins, payment vouchers at the time of purchase, are all clues to prove existence and investment. Valuation, the cost of acquisition, investment and present value should be based on, the two sides of the rise and fall of the expectations are inconsistent, you can agree to a certain point in time or a platform quotation conversion, written into the agreement to avoid future wrangling. If the other party hides and refuses to disclose, it may apply to the court in the lawsuit to order it to declare, and claim to give less points to the party who conceals or transfers.

How the protocol is designed is important. Since the realization is limited, it is all the more necessary to write down who holds it, at what price, in several installments, when to pay it, and how to do it overdue. If necessary, it is agreed that one party will be liable for breach of contract if it fails to pay on time, and even link the repayment to the division of other property. We should also pay attention to the risk boundary. There are policy risks in the trading channel itself. Don't do obvious illegal operations in order to cash out, and don't trust verbal promises. When negotiating, you can talk about the currency together with its role in family investment: whether it is bought with family funds, or whether it is the value added after the individual holds it before marriage, and the weight of compensation is very different.

The key of bitcoin segmentation lies in "negotiation discount + holding evidence": usually keep the exchange account, wallet address, recharge and withdrawal records and screenshots of the holding amount; during negotiation, it is agreed to price at a certain point in market value and specify the payment period and breach clause; if negotiation fails to bring a lawsuit as soon as possible, they will request division together in the divorce lawsuit (the first civil court of Zhejiang high court makes it clear that the divorce lawsuit is a compound lawsuit, may be dealt with together with common property) and apply for the preservation of relevant leads.