Digital Assets and Divorce

May 2, 2024

Digital Assets and the Division of Cryptocurrency within Divorce

As we evolve into an online era, there is a rise in the use of digital currency.

We are seeing more and more cases with ‘crypto’ and digital currencies.

The continued use of digital currencies is ever changing.  When dealing with the division of matrimonial assets, it is important to be vigilant and to ensure that crypto assets are properly disclosed by both parties.

What is Cryptocurrency?

Cryptocurrencies are digital assets that are encrypted and only exist digitally.  They are not regulated and use a decentralised system to record transactions.  Updates happen around every 10 minutes.  It is therefore critical to obtain up-to-date valuations and monitor the valuations during divorce proceedings.

Does Cryptocurrency have to be disclosed?

Individuals are under a duty to provide full and frank financial disclosure.  

Like all other financial assets, cryptocurrency holdings and digital assets are legally required to be disclosed.

What happens with Cryptocurrency in Financial Remedy Proceedings?

If the currency is acquired during the course of the marriage, it will be considered a marital asset.  Therefore, it can be divided or transferred between the spouses.

Having said that, cryptocurrencies which were purchased prior to the marriage or after the breakdown of the marriage can still be claimed against by the other spouse if this money is required to meet the other spouse’s needs.

Key Points to Consider

Cryptocurrency rates change at a fast pace.  It is therefore imperative to obtain both up to date figures and regular checking of the values.

You may need to employ a digital forensic specialist to both find these assets and to value them.

Holly Setchfield

John Hooper & Co

2nd May 2024