How are crypto assets treated in a divorce?

Crypto assets (such as Bitcoin, Ethereum and NFTs (non-fungible tokens)) are subject to the duty of disclosure in divorce proceedings, just like other assets; they must be disclosed to the other party and the court. If the crypto assets are consideredto be matrimonial in nature, then the starting point is that they will be divided equally between the parties.

Crypto assets now form part of many people’s financial portfolios, and therefore have been increasingly subject to financial disputes between the parties during a divorce. On divorce, courts can make orders in respect of crypto assets in much the same way as the more traditional assets. For example, a crypto holding can be transferred from spouse to spouse in its entirety or in a specific proportion by creating a separate crypto account. It is also possible for the court to order for a crypto holding to be sold and the proceeds divided.

Values for crypto assets can fluctuate enormously and therefore it is important that the values are regularly updated when addressing finances on divorce. Due to the unpredictability of such crypto assets, there is difficulty in ensuring a fair outcome and the courts are aware of this. Judges will often aim to ensure that both spouses walk away with a similar proportion of each type of crypto asset making them exposed to the same risk of loss and/or gain.

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