The Family Court treats Bitcoin and other cryptocurrencies as property in a divorce, meaning it’s subject to division in a property settlement. However, tracing, valuing, and ultimately securing these digital assets presents unique challenges that can complicate the process.
What is cryptocurrency considered for property settlement?
Cryptocurrency is considered financial resources under the Family Law Act. This means its value is included in the asset pool alongside the house, superannuation, and other assets. The court’s objective is to ensure a just and equitable outcome, considering the contributions of each party to the relationship and their future needs.
How does the Court determine the value?
Determining the value of cryptocurrency can be complex. Unlike traditional assets like real estate, there isn’t always a readily available market price. Expert evidence from a forensic accountant specialising in cryptocurrency is often required to establish a fair market value at a specific point in time, such as the date of separation.
What if my spouse is hiding cryptocurrency?
The Family Law Act gives the court broad powers to set aside a property settlement where one party has concealed assets. However, proving that cryptocurrency has been deliberately hidden can be difficult. Digital currency transactions can be obscured, and tracing funds across exchanges requires specialist expertise. The legislation outlines offences relating to false or misleading information and structuring transactions to avoid reporting obligations, but proving these offences in a family law context is another matter.
The concealment risk
The decentralised and often anonymous nature of cryptocurrency makes it particularly vulnerable to concealment. Unlike bank accounts, there’s no central authority holding the information. This creates a significant challenge for parties seeking to identify and claim their share of these assets. While the law provides for registration of digital currency exchange services, this doesn’t guarantee full transparency or prevent individuals from using unregulated platforms.
Questions to consider
- What steps have I taken to identify all of my spouse’s cryptocurrency holdings?
- Do I have any evidence suggesting my spouse may be attempting to conceal assets?
- Should I engage a forensic accountant with expertise in cryptocurrency to assist with valuation and tracing?
This information is general in nature and does not constitute legal
advice. For advice specific to your situation, contact JB Solicitors.