Cryptocurrency and Divorce

16th June 2022

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by Daniel Sims, Solicitor, Family Law Department

The news is currently full of reports of a ‘crypto-crash’, with billions reportedly wiped off the online markets, and this may be relevant to divorce settlements for those with modern portfolios including Bitcoin.

Cryptocurrency is a digital currency that can used to buy goods and services online – and as an asset, would be considered in divorce as a financial resource, alongside bank accounts and company shares.

Finding evidence of crypto-assets can be challenging – they can be sold and traded at a click of a button without any significant paper trail, and there is no central register of ownership. There may be hundreds of exchanges operating around the world through which it can be stored or traded. It can be possible to file Injunctions to try and trace or freeze crypto-assets but this can add a significant layer of complexity and financial cost in pursuing.

Once found, it is extremely difficult to attribute value to Bitcoin etc – it is exceptionally volatile, and the value can rocket and plummet very quickly.  News outlets are reporting that crypto-currency has fallen by over 60% since November/December 2021.

Spouses need to be fully aware of the existence of crypto-assets, and of the fluctuating values, and be cautious if accepting a large holding as part of a settlement, perhaps in lieu of more tangible assets such as property equity or bank savings. With market risks, this asset could potentially be worth much less than the other assets in the ‘marital pot’.

If you would like advice on divorce settlements, please contact Daniel Sims directly by email danielsims@fraserdawbarns.com or by telephone 01553 666407

 

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This article aims to supply general information, but it is not intended to constitute advice. Every effort is made to ensure that the law referred to is correct at the date of publication and to avoid any statement which may mislead. However, no duty of care is assumed to any person and no liability is accepted for any omission or inaccuracy. Always seek advice specific to your own circumstances.  Fraser Dawbarns LLP are always happy to provide such advice.

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