Navigating The Division Of Cryptocurrency In Matrimonial Finance Cases (17 August 2023) – Fin Tech

Cryptocurrency: What’s it’s impact in Finance
Cases?

Cryptocurrency is a digital currency that can be traded without
the need for a central monetary authority such as bank or
government. As of 2023, there is estimated to be over 420 million
cryptocurrency users worldwide. So it is no debate that many people
are now familiar with the likes of Cryptocurrency, whether it be
Bitcoin, Litecoin, Dodgecoin or any other cryptocurrency they are
seen as investments which can form part of the matrimonial pot.

With cryptocurrency users on the rise, it is inevitable that
married couples in engaged in finance proceedings need to know the
position regarding the division of cryptocurrency in matrimonial
finance cases.

What if you or your Spouse have Cryptocurrency?

In accordance with the duty to provide full and frank disclosure
in finance matters, you would be obliged to disclose your interest
in the cryptocurrency and its value. To determine value, expert
valuations should be obtained, the Court could then consider the
best way to divide the cryptocurrency.

Risks that could arise where Cryptocurrency forms part of the
Matrimonial Pot

Cryptocurrency is currently unregulated, therefore there is the
risk that either spouse could try to hide the asset by transfer
without it being traced. Therefore if you suspected your spouse
owns cryptocurrency it would be important to consider instructing a
forensic expert to try and trace the cryptocurrency.

If you have evidence to suggest that your spouse has failed to
disclose cryptocurrency or may try to get rid of the same, the
court has the power to freeze their assets under section 37 of the
Matrimonial Clauses Act (MCA) 1973. Cost orders
may also be made against parties who attempt to mislead the court
and their spouses.

The crypto market can be very unpredictable, for example one day
the value of a cryptocurrency could be £10 and the next it
could be worth £1,000. This volatility can make it difficult
for both parties to reach a fair financial settlement.

How Can Duncan Lewis High Net Worth Divorce Solicitors
Assist?

The area of matrimonial law surrounding cryptocurrency is
relatively new, there is currently limited case law on how to deal
with such assets in financial remedy proceedings.

If you are engrossed in ongoing financial remedy proceedings or
you are thinking about initiating financial remedy proceedings, get
in touch with our family department at Duncan Lewis Solicitors for
advice and assistance of your options. The Family department is
experienced in assisting high net worth individuals in divorce
matters with specialist divorce. Our team of experienced financial
remedy solicitors who will be able to identify any issues that may
need to be addressed and solutions to suit each individual’s
circumstances.

Originally published 17 August 2023.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.