Crypto Assets in Divorce

How Are Crypto Assets Treated in Divorce?

Cryptocurrency - such as Bitcoin, Ethereum, and NFTs - is now a common feature in divorce proceedings. These digital assets are treated like any other form of property and are subject to full financial disclosure and division under UK family law.

Legal Context:
Crypto assets must be disclosed in Form E and are assessed for their matrimonial or non-matrimonial status, just like traditional assets.

Are Crypto Assets Considered Matrimonial Property?

Crypto assets acquired during the marriage are typically considered matrimonial property and subject to division. Assets acquired before marriage or after separation may be considered non-matrimonial, unless they were used for joint purposes.

Example:
If one spouse used Bitcoin profits to fund the purchase of the family home, those assets may be considered matrimonial.

How Courts Handle Crypto in Divorce

Courts can:

• Order the transfer of crypto holdings between spouses
• Require the sale of crypto assets and division of proceeds
• Ensure both parties receive a similar proportion of each type of crypto asset to balance risk

Due to the volatility of crypto markets, judges aim to ensure fairness by exposing both parties to similar risks of gain or loss.

Challenges in Valuing and Dividing Crypto

• Price volatility: Values can fluctuate dramatically during proceedings
• Hidden wallets: Crypto can be stored anonymously, making it hard to trace
• Complex ownership: Cryptocurrency assets may require specialist valuation

As a result, regular updates to asset valuations can be essential during financial negotiations.

Need Expert Help?

Vardags’ team of top divorce lawyers delivers a bespoke legal service to HNW and UHNW individuals, their families, and businesses.  We are the only HNW family law firm with an in-house Financial Forensics department. Our team specialises in identifying, tracing, valuing, and forensically reviewing assets, including businesses, property, and investments. 

If you’re going through a divorce and crypto assets are involved, our team of top divorce lawyers and forensic experts can help you protect your interests. We offer a free initial consultation to qualifying individuals.

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