Complete the form below to ask us a question or make an enquiry. We’ll get back to you via phone or email as soon as possible.

Insights

What Are Crypto Assets and How Are They Treated on Divorce?

Posted on 22nd February 2024 in Family Law

Posted by

Bea Taylor

Solicitor
What Are Crypto Assets and How Are They Treated on Divorce?

Where there are finances to be resolved, it is advisable to obtain a Financial Order to record how the matrimonial finances are to be distributed. The first step to address the finances will be for both parties to complete and exchange their full and frank financial disclosure. People are increasingly treating crypto assets as a hobby or an investment opportunity and, however big or small your current holding, it must be disclosed.

Crypto assets are becoming increasingly popular and it is estimated that nearly 1 in 10 adults in Britain have dipped into this market entering into digital ownership. Whilst it can be difficult to determine the values of crypto assets as they have a tendency to fluctuate, they must be disclosed when addressing finances on divorce.

What are crypto assets?

Crypto assets or crypto currencies as they are otherwise known, are digital assets meaning they are held securely online by individuals. There are thousands of types of crypto assets but a few types are more commonly found including Bitcoin and Ethereum. There are also non-fungible assets/tokens (NFTs). These digital assets vary to more conventional assets as there is currently no regulatory body overseeing their use. They are held electronically in a decentralised system meaning they are unregulated by governments and central banks.

Bitcoin is a form of crypto currency which can have a value which increases and decreases depending on the market at the time. Bitcoins can only be bought online and are held in ‘wallets’ which are accessed via a public and private ‘key’. Public keys facilitate transactions between parties and provide proof of all transactions on a blockchain.

Values for crypto assets can fluctuate enormously and therefore it is important that the values are regularly updated when addressing finances on divorce.

What can the Court decide about crypto assets?

The Court can make orders in respect of crypto assets in much the same way as the more traditional assets. 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.

Due to the unpredictable nature of crypto assets there is difficulty in ensuring a fair outcome and this is something Judges are attuned to. Judges will often aim to ensure 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.

Glossary

Wallet – A program that stores cryptocurrency keys (public and/or private) and allows access to your coins.

Public key – Public keys facilitate transactions between parties and provide proof of all transactions on a blockchain.

Private key – Private keys are instruments used by those with ownership over crypto assets and authorise users to make transactions from their account.

How can Tozers help?

Tozers can help by providing expert legal advice and guidance on how to navigate the complexities of dividing crypto assets during a divorce. Our team of experienced lawyers can assist in determining the value of crypto assets, ensuring a fair distribution between spouses, and addressing any legal issues that may arise.

Contact our legal experts

Company & Industry

Related Insights

Insights

NO MORE Week – Raising Awareness of Domestic Abuse and Sexual Violence

Posted on 07th March 2024 in Family Law

Domestic abuse covers a range of types of abuse, including, but not limited to, physical, psychological, sexual, financial and emotional abuse. It is defined as any incident of controlling, coercive or threatening behaviour, violence or abuse between those aged 16 or over who are or have been intimate partners or family members.

Posted by

Sophie Charlton-Rigg

Paralegal
Insights

How Arbitration Can Help You Resolve Your Family Dispute Without Going to Court

Posted on 09th February 2024 in Family Law

The Family Court is under immense pressure. The number of court applications, including issues relating to finances on divorce or separation of an unmarried couple and arrangements for children are rising each year. Cases are taking longer to conclude and very often experiencing delays in listing hearings and, as is happening more frequently, hearings are being moved or even cancelled at short notice due to judicial unavailability.

Posted by

Aimee Aspinall

Associate & Solicitor