Cryptocurrency, once a niche digital asset, is now a central point of contention in high-stakes legal matters such as divorce and inheritance. One of the most pressing questions in these cases is whether a private key—essentially the only way to access crypto assets—can be divided between parties. The straightforward answer, as explained by industry experts and legal precedents, is no: a private key cannot be split in half without risking permanent loss of the associated funds [1].
A private key is a unique, long string of characters that grants access to a cryptocurrency wallet. If someone possesses the key, they can access the funds; if it is lost, the assets become irretrievable. This is unlike a bank account or property, where ownership can be divided or transferred more easily. The article provides a hypothetical example of a private key split into two parts, demonstrating that neither half functions independently to unlock the wallet [1].
Despite the technical impossibility of splitting a private key, there are secure methods to enable shared access to cryptocurrency. One such method is Shamir’s Secret Sharing (SSS), a cryptographic technique that allows a private key to be split into multiple shares. These shares are distributed among parties, and a predefined number of them are required to reconstruct the key. For instance, in a divorce scenario, the key could be split into three parts, with two required to access the wallet [1].
Another effective solution is the use of multisignature wallets, or multisig wallets. These wallets require multiple private keys to authorize a transaction, much like a joint bank account that requires multiple signatories. This approach ensures that neither party can unilaterally move funds without the consent of the other, thereby promoting cooperation and reducing the risk of asset misappropriation [1].
In more contentious or emotionally charged situations, a custodial service or legal escrow agreement may be used. A neutral third party—such as a law firm or a crypto custodian—can hold the private key until the legal terms of the agreement are fulfilled. This method is particularly useful when one party is concerned about the other’s intentions or when there is a need for an impartial guardian of the assets [1].
The legal treatment of cryptocurrency is also evolving. In countries like South Korea, courts have recognized crypto as an intangible asset that can be divided during divorce proceedings. Moreover, blockchain forensic tools are being increasingly used to trace hidden digital assets, making it harder for individuals to conceal their crypto holdings in legal disputes [1].
A real-world example from New York illustrates the stakes involved. During a divorce case, a wife discovered her husband had hidden $500,000 worth of Bitcoin. This case, among others, has led attorneys to report that digital assets now feature in up to half of divorce cases, underscoring the growing importance of understanding crypto ownership in legal contexts [1].
Beyond divorce, the need to share or secure access to cryptocurrency is relevant in estate planning, family trusts, and business partnerships. Tools like SSS and multisig wallets are increasingly used to ensure that crypto assets are managed responsibly and transparently across generations or among stakeholders [1].
As cryptocurrency transitions from a speculative asset to a mainstream financial instrument, the human relationships behind its ownership are just as important as the technology itself. While a private key can’t be split in half, the access it provides can be shared securely through appropriate tools and legal frameworks. For those navigating life events like divorce or inheritance, understanding these mechanisms is not just advisable—it is essential [1].
Source: [1] Can you split a private key in half? Understanding crypto ownership in divorce and beyond (https://coinmarketcap.com/community/articles/6895e20605f6c41c6f2e4326/)
