Valuation and Division of Non-Fungible Tokens and Other Digital Collectibles

The rise of blockchain technology has introduced new challenges in divorce proceedings, particularly with the valuation and division of non-fungible tokens and other digital collectibles. These unique digital assets have gained significant value and popularity, but their intangible nature complicates traditional approaches to property division under Texas law. If you are contemplating seeking a divorce and have concerns about the valuation and division of non-fungible tokens and other digital collectibles, it is in your best interest to meet with an attorney. At McClure Law Group, our dedicated Dallas divorce attorneys have the experience and resources to address these complex issues and help you take the measures necessary to protect your interests.

Under Texas family law, with few exceptions, property acquired during the marriage is presumed to be community property unless proven otherwise. This includes digital assets such as non-fungible tokens, which are digital assets stored on a blockchain that certify ownership of unique items such as digital art, music, videos, and virtual real estate.

In other words, if a non-fungible token was purchased or earned using marital funds, it is subject to division in the divorce. Even if one spouse exclusively manages the non-fungible tokens or stores them in a private digital wallet, they are still considered part of the marital estate.

Unlike cryptocurrencies like Bitcoin, non-fungible tokens are not interchangeable, which makes their valuation more subjective. Determining the fair market value of non-fungible tokens during divorce is a critical step, however. Without proper valuation, one spouse may receive an unfair share of the marital estate.

The valuation and division of non-fungible tokens and other digital collectibles can be particularly difficult due to their volatile market value, limited liquidity, and lack of standardized appraisal methods. While non-fungible tokens acquired during the marriage are often considered community property that is subject to division, disputes frequently arise over the ownership, valuation, and future appreciation potential of non-fungible tokens. For example, one party may argue that a non-fungible token’s speculative value is too uncertain to include in the marital estate, while the other may assert that it represents a significant asset requiring division.

To ensure proper division, Texas courts must first determine the value of the non-fungible token. This often requires the involvement of financial experts, appraisers, or blockchain analysts who can assess the non-fungible token's current market value, its historical performance, and its potential for appreciation. Given the speculative nature of non-fungible tokens, courts may also consider whether holding or liquidating the asset is in the best interest of both parties.

Spouses must also address the practical challenges of dividing non-fungible tokens. Unlike physical property or cash, non-fungible tokens cannot be split equally without selling or transferring ownership. One option may involve awarding the non-fungible tokens to one spouse while providing the other with an equivalent share of other assets. Another approach is to sell the non-fungible token and divide the proceeds equally. These decisions require careful analysis to ensure that both parties receive an equitable share of the marital estate.

The valuation and division of non-fungible tokens and other digital collectibles can have a significant impact on the outcome of a divorce. If one party conceals non-fungible tokens or undervalues their worth, it can lead to an inequitable division of property. As a result, it is crucial to conduct a thorough investigation into all digital assets to ensure full transparency. This includes reviewing blockchain records, digital wallets, and online marketplaces where non-fungible tokens are traded.

The valuation and division of non-fungible tokens and other digital collectibles in divorce present unique challenges that require experienced legal representation. If you are navigating a divorce involving non-fungible tokens and other digital collectibles, it is crucial to meet with an attorney regarding your rights. At McClure Law Group, our capable Dallas divorce attorneys understand the complexities of digital assets and are committed to helping clients achieve equitable outcomes. Our main office is located in Dallas, and we also have a Collin-County office in Plano where we meet clients by appointment. We frequently assist individuals in divorce matters in Dallas, Fort Worth, Rockwall, Frisco, McKinney, Irving, Richardson, and Garland, as well as in cities across Dallas, Collin, Denton, Rockwall, Tarrant, and Grayson Counties. You can contact us today at 214.692.8200 or complete our online form to schedule a confidential consultation.