Cryptocurrency is an asset -- and that means it’s something you can lose.

In today’s litigious society, Asset Protection is more important than ever. And crypto, just like any other asset, need protection. The strategies might differ, but the need is the same.

If cryptocurrency is owned in your name and you are sued, you can potentially lose it, even if you have insurance. 

Experts feel we could be experiencing a digital currency bubble. That isn’t to say money can’t be made, but it may be a risky investment. Regardless, you will want to protect it.

A key consideration to pay mind to is its volatility: the value of cryptocurrency could go up or down very quickly. That would influence the type of protection you might use. The way we might protect $100,000, for instance, is different than how we would protect $2 million. And $100,000 in crypto could end up being $2 million in a few months. (And vise-versa: $2 million in crypto could only be worth $100,000 in a short while.) We need to take volatility into consideration when we design an Asset Protection strategy.

The decentralized and transparent nature of cryptocurrency is a draw for many. All transactions, while secure, are also public. How does this mesh with Asset Protection?

Some have the impression that Asset Protection is about hiding or secrecy, when in fact it’s actually the opposite.  Asset Protection should be about protection. Whether we are protecting something as transparent as cryptocurrency, or a private asset, a good Asset Protection plan should revolve around how an asset is titled and protected, and not whether it’s hidden or kept secret.

Obviously people like privacy. To the extent we can honor that, we try to be private. But I tell every client to expect at some point if they are sued and deposed they are going to have to disclose what they have.  Our goal is just that it is protected. 

At the end of the day, anything can be an asset, whether it’s a piece of real estate, a car or cryptocurrency. If it has value, it can be lost without an adequate Asset Protection plan.

Take the first steps to get your team of advisers and lawyers on the same page and talking.

What good is it if your financial adviser makes you money in cryptocurrency, if you lose it all to a lawsuit? What good is it if you protect everything from a lawsuit if when you die half of it goes to the government in estate tax?

Hillel Presser Esq., MBA is an experienced Asset Protection Attorney and managing partner of The Presser Law Firm, P.A. His firm represents individuals and businesses in connection with the establishment of comprehensive Asset Protection plans that incorporate both domestic and international components.

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