Bitcoin, and other cryptocurrencies, are treated as property for the purposes of a property settlement in NSW. This means its value must be determined and included in the asset pool, but establishing that value can be complex as its price fluctuates significantly and tracing ownership can be difficult.
What is considered ‘property’?
The Family Law Act defines ‘property’ broadly to include financial resources and assets owned by either party to the marriage. This includes cryptocurrency like Bitcoin. As such, any Bitcoin acquired during the marriage, or before but with an impact on the marriage, is potentially subject to division in a property settlement.
How is Bitcoin valued?
The value of Bitcoin is determined as at the date of separation. Generally, this is established by obtaining evidence of the Bitcoin’s value from a reputable cryptocurrency exchange at that specific date and time. Multiple sources may be used to corroborate the valuation. The court will consider the evidence presented by both parties to determine a fair market value.
What if my former partner doesn’t disclose their Bitcoin?
Under section 90M, parties have a duty to disclose all assets, including cryptocurrency. Failure to disclose assets can have serious consequences. The Family Law Act gives the court broad powers to set aside a property settlement where one party has concealed assets. However, proving non-disclosure can be challenging, requiring forensic accounting and tracing of transactions.
The tracing problem
One of the biggest difficulties with Bitcoin is tracing its ownership and movements. Unlike traditional assets like real estate or bank accounts, Bitcoin transactions can be pseudonymous and complex. Establishing that specific Bitcoin holdings were acquired *during* the marriage, and haven’t been moved or hidden, can require specialist expertise and significant investigation.
Questions to consider
- What evidence do I have to prove the extent of my former partner’s Bitcoin holdings?
- Should I engage a forensic accountant to trace Bitcoin transactions and establish its value?
- What are the potential consequences if my former partner fails to fully disclose their cryptocurrency assets?
This information is general in nature and does not constitute legal
advice. For advice specific to your situation, contact JB Solicitors.