More people than ever are investing in cryptocurrency. Increased accessibility has made this category of volatile asset intriguing even to some that are technologically averse. As I write this, Dogecoin is hitting new highs, while one Bitcoin is valued at over $60,000 and hundreds of other “altcoins” are bought and sold on exchanges such as Coinbase (which itself just had a successful IPO this week – further showing how mainstream crypto has become).
If you are considering bankruptcy, it’s likely that you don’t have a Bitcoin wallet with multiple Bitcoin worth a huge sum. But you may own fractional Bitcoin, or some amount of other cryptocurrency. These assets, like all assets you own, must be disclosed in a bankruptcy. Depending on the amount, we may be able to protect the value of the coins with a bankruptcy exemption commonly called the “wildcard” exemption. This is especially true for those who do not own real property (or whose real property has limited or no equity). If the wildcard exemption is unavailable to you, we can discuss other potential options to protect your asset.
Failure to disclose cryptocurrency, or any asset of value, in a bankruptcy can have harsh consequences, from the denial of your discharge to criminal prosecution. Your attorney can properly advise you about this and all of your assets so long as he or she knows about these assets upfront.
Michael F. Barrett 