
California’s First Big Crypto Divorce Case – DeSouza v. DeSouza
In a previous post, I gave you a simple introduction to a complex topic: cryptocurrency, and specifically, how cryptocurrency may be divided in a California divorce. In general terms, cryptocurrency is divided essentially the way any other digital asset such as gift cards, airline mileage, and downloaded media might be divided. However, because the value of crypto can fluctuate dramatically and frequently, and because this is a fairly new area, there is still a very small body of related case law upon which to draw, which means there are no hard and fast rules about how the court may choose to handle your case. In one notable California divorce between Erica and Francis deSouza, the question of how to divide the millions of dollars of value in crypto became pretty complicated. The deSouza case is widely considered the first “big” crypto divorce case, and it’s worth looking at. If you find yourself feeling overwhelmed by the details, just push through—I promise the ending is worth it! January 2013: Erica Is Granted a Temporary Restraining Order When Erica filed for divorce in January 2013, she was also granted a temporary restraining order that prohibited Francis from “[t]ransferring, encumbering, hypothecating, concealing, or in any way disposing of any property, real or personal, whether community, quasi-community, or separate, without the written consent of the other party or an order of the court, except in the usual course of business or for the necessities of life.” In other words, Francis was required to obtain permission from Erica if he wanted to—among other things—buy or sell cryptocurrency or anything else. April 2013: Francis Violates the Restraining Order and Buys Bitcoin Just three months later, over the course of less than a week in April 2013, Francis purchased bitcoin in three separate transactions through a Japanese