Cryptocurrencies have been surging in popularity and news coverage. As of 24 January 2025, 1 Bitcoin (BTC), was worth around £84,800. This has turned something which was once just a niche curiosity online, into a significant asset. If you are going through divorce proceedings and are attempting to address the matrimonial finances, digital currencies present unique challenges.
It is important to understand what cryptocurrencies are and how they are dealt with during your divorce.
What is cryptocurrency?
Simply, cryptocurrency is a digital currency which can be transferred between individuals without the need for a bank. The first cryptocurrency was Bitcoin with the software being made available to the public in 2009. According to Forbes, the global cryptocurrency market cap as of January 2025 is $3.79 trillion, which is an increase of 132.48% from this point last year.
Under UK law, digital currencies are considered as property for the purposes of divorce proceedings. This means, similarly to cars, houses or cash, cryptocurrency owned by either spouse during the marriage can be considered in the division of assets.
Any transactions involving cryptocurrencies are recorded and verified on the ‘blockchain’.
Cryptocurrencies are often held in digital wallets, which means that it can be difficult to identify and locate these wallets. It may be the case that your partner has cryptocurrency assets which you are not even aware exist.
The issues with cryptocurrencies in divorce?
The valuation of cryptocurrencies is a complex matter as they are extremely volatile in nature. As shown by late 2022, when the price of 1 BTC had dipped to around £14,000 – dramatic fluctuations in value can occur even during proceedings. It can therefore be difficult to keep track of the exact value of the assets.
The value of cryptocurrencies can fluctuate hugely in a short period of time, meaning that up-to-date valuations are vital throughout the court or negotiation process.
This volatility essentially means that one day the cryptocurrency could represent a significant asset, yet the next day could have diminished in value. It may also be appropriate to use an average valuation over a chosen period of time.
Does my partner have to disclose cryptocurrency assets?
Within matrimonial finance proceedings, there is a duty on both parties to provide full and frank financial disclosure of all financial assets. This means that you and your spouse are required by law to reveal all assets, including cryptocurrencies.
How do I find out if my partner is hiding cryptocurrency assets and how can I find it?
The issue with cryptocurrencies is they are not tied to a centralized bank, but rather are contained in digital wallets. These wallets can be anonymous or where your partner has used a pseudonym.
If you suspect that your spouse is hiding assets, and if there is suspicion of non-disclosure then a forensic accountant or digital expert can be appointed to trace these assets, however this can be costly and time consuming.
In the USA, during divorce proceedings a wife was suspicious that her husband earned $3 million annually but did not have many physical assets. It took over six months and a forensic accountant to uncover that the husband had twelve Bitcoins in an undisclosed crypto wallet, which were worth $500,000.
How can E J Coombs Solicitors help me?
Financial orders can significantly impact your future financial security, so it is imperative that you seek expert legal advice. Contact us using the links below to speak to one of our experienced specialist family lawyers.