CRYPTOCURRENCY IN DIVORCE PROCEEDINGS….a tangled web…

Cryptocurrency, like any other asset in a Divorce, must be disclosed and of course, can be shared. 

Both parties have a duty to provide full and frank disclosure of all matrimonial assets. In the absence of full disclosure, and one party potentially trying to hide an asset, it is impossible to ascertain exactly what is “in the pot,” and consequently, what would be a fair division of that pot.

How is cryptocurrency different to other assets?

Cryptocurrency is a decentralised digital currency.  A digital asset, held in an online wallet or exchange which stores the public and private keys to the currency, in what seems like another world. Because of the other worldliness of this type of asset, those who own it can attempt to hide its existence by failing to disclose it. This may be relatively easy to do if the other party is not aware of its existence.

Issues with disclosure

If you believe that your partner may have failed to disclose cryptocurrency then the starting point is a thorough analysis of their Bank statements. Payments to trading platforms/exchanges are a giveaway as to the existence of cryptocurrency. In the absence of disclosure of cryptocurrency, then payments of this nature can be brought to the attention of the Court and inferences thereafter drawn.

Where Cryptocurrency has been disclosed, then a screenshot of an online wallet is not sufficient disclosure. A full transaction history of the ledger should be requested to ascertain a value, whether a party has been attempting to move the asset or, dissipate it during the post-separation negotiations or proceedings.

If you believe that your partner is hiding or dissipating cryptocurrency then an application to the Court can be made under section 37 of the Matrimonial Causes Act 1973 for an order preventing disposition or a freezing Order. Both such applications can be made in respect of other assets you believe are being hidden or dissipated within divorce proceedings, not only cryptocurrency. The purpose of such interim orders is to preserve the assets until a judgement can be enforced.

Such applications can be complex in respect of cryptocurrency due to the very nature of the asset and indeed jurisdictional issues. It is highly recommended that you seek advice early on in a divorce where crypto assets are involved or where you believe any other assets are being hidden or dissipated.

At Browell Smith and Co we provide clear and tailored advice and assistance in respect of your specific family circumstances. Our Team are highly experienced in this area and able to advise and assist you in negotiating an agreement and / or making an application to the Court should such a step become necessary.