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What are crypto assets and how are they treated in divorce?

Cryptocurrency and Divorce: What You Need to Know
With the surge in cryptocurrency’s popularity, it’s no surprise crypto assets are becoming increasingly significant in divorce settlements. As of 2024, over 23,000 cryptocurrencies exist, valued collectively at over £808 billion. If digital assets like Bitcoin or Ethereum are part of your marital assets, here’s what you need to know.
What Are Crypto Assets?
Crypto assets, or cryptocurrencies, are digital currencies using blockchain technology. Unlike traditional currencies controlled by banks and governments, cryptocurrencies operate decentralised and peer-to-peer. Popular examples include Bitcoin and Ethereum, though thousands of others exist.
In divorce cases, crypto assets are treated as valuable items that can be owned, transferred, and included in settlements, much like traditional financial assets.
Are Crypto Assets Considered in Divorce Settlements?
Yes. In the UK, crypto assets are handled similarly to other financial assets. Both parties are required to provide “full and frank” disclosure of all financial holdings, including cryptocurrencies. This ensures fair and complete division of the marital estate.
Valuation can be challenging due to market volatility, but crypto assets are undoubtedly part of divorce negotiations.
How Are Crypto Assets Valued in Divorce?
Accurately valuing crypto assets can be complex because their prices fluctuate rapidly. Unlike stable assets such as property, cryptocurrencies may dramatically rise or fall in value within short periods.
Typically, valuation is calculated by multiplying the number of crypto tokens by their current market price. Timing is crucial to ensure fairness, especially considering potential capital gains tax if the assets have increased significantly in value.
For more information, see the official HMRC guidance on cryptocurrency taxation.
Dividing Crypto Assets in a Divorce Settlement
There are several ways to handle crypto assets during divorce:
- Transfer of Ownership: Transferring crypto assets directly to your spouse’s wallet.
- Liquidation and Division: Selling crypto assets and dividing the proceeds, carefully considering market timing.
- Offsetting with Other Assets: Agreeing to offset cryptocurrency against other marital assets like property or savings, typically using an average valuation.
What If Crypto Assets Are Hidden?
Transparency is legally required. If you suspect your spouse is hiding cryptocurrency, consider these steps:
- Review financial transactions for transfers to exchanges such as Coinbase or Binance.
- Engage a forensic financial investigator.
- Request a court order for disclosure from cryptocurrency exchanges.
The court can adjust settlements if hidden assets are discovered.
Protecting Your Crypto Assets in Divorce
If you own crypto assets, maintain clear transaction records—dates, amounts, and values—to protect yourself and avoid disputes. Professional advice on proper disclosure and asset valuation is vital to ensure fairness.
Please Remember
Cryptocurrency is increasingly relevant in divorce settlements, requiring careful handling for fairness and transparency. Consulting legal and financial experts early can significantly simplify the division process.
Ready to Discuss Your Situation?
Crypto assets add complexity to divorce proceedings, but you’re not alone. Our specialist team at OLS Solicitors is ready to assist. Whether you’re starting divorce proceedings or need clarity on your rights, contact us today for personalised advice.