Call us: Mon - Fri 8:30am - 7pm, Sat - Sun 9am - 5pm
Call local rate 0330 056 3171
Mon - Fri 8:30am - 7pm | Sat - Sun 9am - 5pm
Call local rate 0330 056 3171
Mon - Fri 8:30am - 7pm | Sat - Sun 9am - 5pm

A guide to cryptocurrency in divorce

With the rise of cryptocurrency divorce lawyer, and Stowe partner, Liza Gatrell answers common questions about how cryptocurrency is treated in divorce.

Cryptocurrency and divorce

Division of assets is often a central issue during divorce. Cryptocurrencies like Bitcoin, Ethereum, and others have become increasingly popular in recent years, and they can add an additional layer of complexity to the asset division process.

When it comes to cryptocurrency and divorce, one of the main challenges is determining the value of the assets included in the divorce financial settlement. Cryptocurrencies can be highly volatile, and their value can fluctuate wildly in a short amount of time. Therefore, determining the exact value of the assets can be difficult.

Another challenge is identifying and locating the assets. Cryptocurrencies are often held in digital wallets, and it can be difficult to identify and locate these wallets. In some cases, one spouse may have been responsible for managing the cryptocurrency assets, and the other spouse may not even be aware that they exist.

The rise of cryptocurrency

In January 2022, Law Society guidance said that “…there are (with only slight exaggeration) almost as many definitions of a cryptocurrency as there are cryptocurrencies”. In family proceedings we most often come across notional payment tokens such as Bitcoin. Bitcoin was initially introduced in 2008 and its value has risen steadily since. As at June 2022 1BTC was worth £17,124.

Cryptocurrencies form part of a wider group of digital assets, which include digital files and domain names as just two examples. In December 2021 there were over 9,000 cryptocurrencies in circulation with a total value of £1.76 trillion and Bitcoin was just one.

How is cryptocurrency different to other assets?

Cryptocurrencies are unregulated by governments or central banks. Whilst they act as a form of currency, they are entirely digital and have no central bank or storage place. Some cryptocurrencies are used to transfer money globally, whilst others are a form of payment for goods and services. They are based on cryptographic code stored in a digital wallet app. The code forms a blockchain, which is similar to a bank’s ledger.

The blockchain is a shared public ledger that records all transactions and is updated approximately every 10 minutes. It consists of two codes, each of which is called a key. The public key is visible to anyone, whereas the private key is confidential to the individual. The private key is stored in a wallet. To be able to purchase goods or services you need both keys.

Should cryptocurrency be considered on divorce?

In light if the rise of the value of cryptocurrency these investments have become increasingly relevant within divorce proceedings. Cryptocurrencies have been determined as “property” in England and Wales. This means that they can be transferred between parties within divorce proceedings via a property adjustment order under s.24 of the Matrimonial Causes Act 1973.

Given their volatility, and tendency for value to fluctuate, it is vital that up-to-date valuations are used in negotiations and at hearings.

Is it easier to hide crypto assets?

Both parties within financial proceedings have a duty of full and frank financial disclosure.

However, because cryptocurrencies are largely unregulated there is the potential for them to enable tax evasion, money launders and other forms of illegal trading on the “dark web”.

They should be disclosed within the Form E in the same way as any other property, but due to their levels of privacy they can be difficult to trace or link to a particular individual.

Without the private and public keys, it is nearly impossible to identify what is owned. There should be records that enable information to be obtained as to the holding, record of trades and the value of the current holding.

It is therefore very important that the right questions are asked. Digital forensic evidence may also be necessary from a cryptocurrency expert to reveal the user and their transaction history.

How will cryptocurrency be distributed on divorce?

Once the value of the cryptocurrency assets has been determined, they will need to be divided in the same way as other assets. This can be done through lawyer negotiation, mediation, or through the court system.

The specific laws and regulations around cryptocurrency and divorce can vary depending on the jurisdiction, so it’s important to consult with a family lawyer who is familiar with these issues.

Overall, cryptocurrency can add an additional layer of complexity to the divorce process, but it’s possible to navigate these issues with the help of a knowledgeable family lawyer and a fair and reasonable approach to asset division.

Useful links

How does financial disclosure work in divorce?

Hidden financial assets in divorce

Stowe Support – Finances 

Get in touch

For more information on divorce finances please do get in touch with our Client Care Team using the details below or make an online enquiry.

Liza is based in our Winchester & Southampton offices and is experienced in divorce, financial matters, and legal issues issues involving children.

Contact us

As the UK's largest family law firm we understand that every case is personal.

Leave a comment

Help & advice categories


Newsletter Sign Up

Sign up for advice on divorce and relationships from our lawyers, divorce coaches and relationship experts.

What type of information are you looking for?

Privacy Policy