Hawai’i Appeals Court Upholds Valuation of Marital Bitcoin in Divorce Case

On Thursday, February 8, 2024, the Intermediate Court of Appeals of Hawai’i upheld a family court’s decision regarding child custody, visitation, and property division in the divorce case between S.R. and J.R.

The case involved disputes over child custody and visitation arrangements, as well as the valuation of marital property, including one bitcoin owned by S.R. The family court had previously found that S.R. committed acts of family violence, but he argued on appeal that he had addressed this issue. However, the appellate court found that the lower court properly considered testimony and evidence regarding the history of abuse and did not err in its custody and visitation orders.

Specifically, the family court awarded sole physical and legal custody to J.R. and allowed her to relocate to Florida with the child. It granted S.R. visitation through video calls and limited in-person visits to only four hours when the parties were in the same location. S.R. argued this did not provide reasonable or meaningful contact, but the appeals court upheld the ruling, finding the family court had properly considered the child’s best interests and schedule.

One key disputed asset was one bitcoin owned by S.R. prior to the divorce. Its value fluctuated greatly over time. The family court assigned it a value as of the date of the last evidentiary hearing in the case. S.R. argued on appeal that this was an error given later changes in the cryptocurrency’s price. However, the appeals court found no clear error, noting the family court had properly taken the asset’s volatility into account.

S.R. also challenged several of the family court’s findings regarding the parties’ financial circumstances and income calculations for child support purposes. While the appellate court found one minor error in the lower court’s factual findings, it determined this was harmless and did not undermine the overall property division or child support order.

Ultimately, the appeals court affirmed the family court’s rulings, finding no abuses of discretion or reversible legal errors had been demonstrated. The case demonstrated the complex financial and custody issues that can arise in divorce litigation, especially regarding volatile assets like Bitcoin. The appellate decision provides clarity around considering a crypto asset’s market fluctuations for divorce property division purposes.

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