The Family Court can take steps to prevent a party from dealing with cryptocurrency during NSW divorce proceedings, but a direct ‘freeze’ isn’t automatically available. The court’s powers are broad, but securing cryptocurrency requires specific orders and faces unique challenges due to its digital nature.
What orders can the Court make?
The Family Law Act gives the court the power to make various orders to preserve the asset pool during property settlement negotiations. While the legislation doesn’t specifically mention cryptocurrency, the court can make orders preventing a party from disposing of, transferring, or dealing with their digital assets. This is done through interim orders made under section 102PH, which can be put in place quickly without a full hearing on the merits of the case.
Can the Court compel disclosure of cryptocurrency holdings?
Yes. Parties have a duty to disclose all financial resources, including cryptocurrency. Failure to do so can have serious consequences, as the court has broad powers to set aside a property settlement if assets have been concealed. However, locating and valuing cryptocurrency can be complex, requiring specialist forensic accounting expertise.
What about urgent situations?
In situations where a child requires immediate financial assistance, the court can make urgent child maintenance orders under section 66Q. While this doesn’t directly address cryptocurrency, it demonstrates the court’s willingness to act swiftly to protect a child’s financial wellbeing, which could indirectly influence decisions regarding access to other assets.
The valuation problem
Determining the value of cryptocurrency is a significant hurdle. Unlike traditional assets like property or shares, the value of cryptocurrency is highly volatile and can fluctuate rapidly. This makes it difficult to agree on a fair value for property settlement purposes. Furthermore, the court does not have specific provisions for the renewal of registration of a person’s digital currency exchange, as outlined in section 76H, which adds another layer of complexity.
Questions to consider
- What steps have you taken to gather evidence of your spouse’s cryptocurrency holdings?
- Do you understand the risks associated with the volatility of cryptocurrency and how this might impact your property settlement?
- Should we engage a forensic accountant with expertise in tracing and valuing digital assets?
This information is general in nature and does not constitute legal
advice. For advice specific to your situation, contact JB Solicitors.