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.