Divorce & Family
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Financial settlements upon divorce often involve financial assets such as property, pensions, bank accounts and income. With the rise in popularity over recent years, cryptocurrency is becoming an increasingly common financial asset, to be considered upon divorce.
Like any other assets, cryptocurrency will be considered a matrimonial asset, if acquired during the course of the marriage. Therefore, it does not matter who purchased the asset or where it is stored. Marital assets are not limited to tangible items, they include intangible property, such as cryptocurrency.
Cryptocurrency will be considered depending on the facts of the case, like any other asset on divorce. The court will consider how the matrimonial assets should be divided in order to meet the needs of the parties, and achieve fairness.
Parties to divorce proceedings have a duty to provide full and frank disclosure of all of their assets, this includes cryptocurrency. However, the intentionally anonymous nature of cryptocurrencies make them notoriously difficult to trace.
If your spouse has refused to declare their cryptocurrency holding within their financial disclosure, the key is to ascertain the point of entry into or exit out of cryptocurrencies. One way to accomplish this could be an analysis of the parties’ bank account, as often cryptocurrency is purchased using ‘real’ currency. Specialist forensic accountants can often play a crucial role in assisting with this. It is important that you do not obtain information through dishonestly accessing your spouse’s accounts and information, as you could face sanctions, via both the family and criminal courts.
If your spouse is found to have engaged in non-disclosure of cryptocurrency assets, then penalties imposed by the court can be severe, and include imprisonment. More commonly, a finding of dishonesty may lead to the other party being awarded a larger portion of the matrimonial assets.
Get Divorce Or Separation Advice
The courts have wide-ranging powers to deal with cryptocurrency assets, as with other financial assets, such as orders for sale or transfer. Parties should consider obtaining specialist tax advice if selling or transferring cryptocurrency, as this may give rise to tax liabilities.
It is important that you obtain expert legal advice when considering a financial settlement upon divorce. Contact our family law specialists on 0800 470 0335 to arrange a consultation.
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