Family lawyers are reporting a rise in cryptocurrency assets featuring in divorce proceedings and how, in some cases, these assets have been concealed by spouses.
Digital assets, including cryptocurrency, are a growing part of many financial portfolios. They have also become one of the most complex and contentious elements of modern financial settlements which, if undisclosed, can lead to serious consequences.
Teresa Davidson, partner and head of family at Winston Solicitors, says her practice is seeing an increase in cases where cryptocurrency forms part of the asset landscape, particularly among high-net-worth individuals and business owners. She said:
“The difficulty is that crypto can feel easier to conceal than traditional assets, as it isn’t held in a high street bank account and can be stored across multiple wallets or international exchanges. Yet it is still a financial resource, and under English law, it must be disclosed during the process of divorce.
“In certain matters, digital assets represent a relatively small investment. In others, they are worth hundreds of thousands – or significantly more.”
From a legal perspective, cryptocurrency, NFTs and other digital assets are treated the same way as more traditional investments. Under the Matrimonial Causes Act 1973, the court must consider all financial resources available to both parties, which includes Bitcoin, Ethereum, NFTs, online trading accounts and even valuable metaverse assets.
Davidson added:
“There is sometimes a misconception that crypto is untraceable. Yet in reality, blockchain transactions leave a digital footprint. In more complex or high-value cases, we will work with forensic accountants and digital tracing specialists to identify undisclosed wallets and analyse transaction histories.
Matt Foster, senior associate at Charles Russell Speechlys, says that allegations about non-disclosure of cryptocurrency can often infect everything else in a case and make reaching a settlement much more complicated. He explained:
“The spouse alleging non-disclosure will often be faced with limited information and a potentially hefty bill from a blockchain investigations specialist. The spouse on the receiving end of an allegation will often be faced with the near impossible task of proving a negative – i.e. evidencing the non-existence of alleged cryptocurrency.”
Davidson added:
“As technology evolves, the law continues to apply the same core principles: fairness and transparency. Whether assets are held in property portfolios or on the blockchain, they must be disclosed and brought into the open.
“With the rise of digital wealth, we are seeing greater use of pre-nuptial and post-nuptial agreements to address how crypto and other digital investments should be treated if the marriage ends. These agreements can provide clarity around valuation, division and future gains, which can significantly reduce conflict further down the line.”
