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The division of property and other assets is a key part of the divorce process. It is important for separating couples to understand their value as some assets, such as bank accounts and personal possessions, are easier to value and understand than others, for example pensions, trusts and cryptocurrency.

Cryptocurrency is becoming a more common feature in divorce settlements and civil partnership dissolutions, and the anonymity of these assets has also resulted in it being used to conceal assets on divorce. It’s important when making these investments to understand how they are dealt with on divorce and what you can do to identify these assets if you think your partner is concealing them.

What is cryptocurrency?

Cryptocurrency is a digital currency. It can be used for highly secure transactions, as well as trading for profit, in a similar way to trading on the stock market. Cryptocurrency transactions are conducted through the sharing of passwords. Each password relates to a block of transactions and represents a number of digital coins. Cryptocurrency is an umbrella term, and there are various types of cryptocurrencies with the most popular being Bitcoin.

Cryptocurrency is held in a digital wallet. To ensure their security, these wallets are secured by keycodes. Most digital wallets can be accessed via cryptocurrency accounts which can allow the account holder to view their cryptocurrency or trade.

How is cryptocurrency valued on divorce?

Financial disclosure is an important part of the divorce process. Divorcing couples are required to disclose and provide details of their assets and liabilities. Before any asset can be disclosed, it needs to be valued, or at least the owner needs to know what it might be worth.

Cryptocurrency is like a stock or share and its value is determined by market forces. Similar to shares, each unit of cryptocurrency has a value, though of course those values can change daily.

If a cryptocurrency owner has access to a portfolio, they may be able to see the value of their currency on there, and this is probably the most straightforward way of obtaining this. But due to the volatile nature of cryptocurrency, the value should be regularly monitored with any significant changes being disclosed to the other party.

What do I do if my divorcing partner is hiding cryptocurrency?

If you are concerned that your partner has not disclosed details of their cryptocurrency, this should be addressed as soon as possible by closely looking at the bank statements disclosed to see if any particular transactions make reference to cryptocurrency. In some cases, the court can order your partner to provide details of any particular transactions as well as disclose details of their cryptocurrency. If your partner denies the existence of cryptocurrency, this should be brought to the court’s attention without delay, and the court can consider this and make inferences as necessary.

Similarly, your partner’s tax return should be considered to see whether details about any other sources of income have been provided. If their tax return has not been provided with their financial disclosure, request this from your partner or their solicitor. If they do not provide this, raise this as an issue at Court. Do not try to obtain such documentation yourself by looking through your partner’s personal papers, emails, or accounts as you could be accused of data hacking.

How is cryptocurrency divided up in a divorce?

Cryptocurrency is included in the general division of assets. How assets are divided will be dependent on the facts particular to the case such as the parties’ needs, their contributions, the length of marriage and whether there are any children.

Divorcing couples also need to think about what they are hoping to achieve and what their priorities are. One side may wish to continue investing in cryptocurrency, whereas another party may prefer more secure assets such as a cash lump sum. Equally, both may wish to hold cryptocurrency, and it is possible for any portfolio to be shared, in equal or unequal shares. Alternatively, they can agree to sell the cryptocurrency and split the proceeds.

Understanding how to deal with cryptocurrency and other digital currency on divorce  requires careful consideration and in most cases an expert’s assistance.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.