Does cryptocurrency have a part to play in a divorce settlement?

Increasingly, it does. As cryptocurrency (“crypto”) and other digital assets grow in importance as a constituent of personal wealth, they are rewriting the rules of disclosure and division in modern divorce.

Whether it’s Bitcoin, Ethereum or a more obscure Altcoin, crypto is no longer just for tech enthusiasts. Crypto has gone mainstream and is featuring more and more when disputes reach the family courts. Research by the Financial Conduct Authority found that around 12% of UK adults owned crypto in 2024, up from 4% in 2021.

What challenges arise in disclosure and division of assets?

Disclosure is the mandatory process by which parties to a relationship breakdown or other dispute share relevant documents and information. 

It can be particularly tricky to enforce full disclosure where crypto is involved. A party may suspect the other is hiding money in crypto wallets. However, unlike a bank account or property, crypto can be very hard to identify if someone doesn’t want to disclose it.

When a crypto account is identified, assessing its value isn’t always straightforward. Crypto prices can swing wildly, making it difficult to divide assets fairly with reference to a specific point in time.

Why is crypto so hard to track down?

There are many factors that contribute to this.  Because crypto is a new asset class, it is relatively unregulated.  Individuals can purchase it easily without needing the help of a financial adviser or institution. For those who don’t want to share fairly, it can act like a virtual offshore bank account.

Crypto wallets don’t come with monthly statements or sit on a shelf in the home office. They may be stored on phones, encrypted USB sticks or hidden behind ‘seed phrases’ – a string of 12 or more random words used to access a wallet. If someone claims they’ve lost access, proving otherwise is tricky.

How does this fit with UK divorce law?

The answer is: not very well.  Whilst UK law requires full and frank financial disclosure, the practical application of this requirement relies heavily on honesty. Divorcing couples are often only required to share financial data for the past 12 months unless something triggers further scrutiny. If crypto transactions happened at an earlier date, or are deliberately excluded, they may never come to light.

There is little formal guidance or case law, because the widespread use of crypto is relatively new.

What can make you suspect that your partner has undisclosed digital assets?

You may become suspicious because something just doesn’t look right. You may spot bank transfers to unknown accounts, or sudden changes in spending patterns. Or you may have been told about investments at a time when the relationship was more open and amicable.

What can you do about it?

Forensic accountants can be brought in to investigate, using special tools to trace the blockchain that is the basis of the crypto. However, this comes at a cost and results are not guaranteed.  It may therefore only be worth considering if there is good reason to suspect that the assets at stake are of a high value.

If you think your partner may hold a significant amount of crypto, you should raise this with your divorce lawyer at an early stage.  This may give rise to a search as part of the disclosure process.  It is far better to achieve the fullest possible disclosure before a divorce is finalised, rather than attempt to overturn a financial settlement at a later date on the basis of fraud or non-disclosure.

Whatever your suspicions, take professional advice and proceed with care. Covert attempts to access a partner’s digital accounts or gather evidence without consent could breach privacy laws.  Evidence gathered improperly may be ruled inadmissible and you may find yourself accused of harassment. It is often better for your partner to be notified formally of your suspicions via your lawyer than to take action yourself to investigate your partner’s assets.

In conclusion

Sensible steps include:

  • Keeping records: joint bank statements and other documents may contain clues to transfers that have been made to crypto wallets or exchange accounts

  • Raising concerns early:  even a vague suspicion is worth flagging to your lawyer

  • Being curious and raising the right questions: if your partner showed an interest in crypto previously, assume it could still be part of the picture

As relationships – and finances – become more digitally complex, crypto is fast becoming part of the mainstream in family law. Ensuring it’s properly considered could mean the difference between a clean, fair break and a costly oversight.