A Bitcoin property settlement involves identifying digital assets as part of the overall asset pool and using court orders to determine their division. The core complication is the tension between assets held in regulated exchange services and those held in private, decentralized wallets.
Digital currency exchange regulation
The law provides a registration system for providers of digital currency exchange services, with the AUSTRAC CEO maintaining the Digital Currency Exchange Register. Because these providers must be registered to avoid offences and civil penalties, assets held through these services are generally easier to identify. This regulatory framework provides a starting point for tracing digital assets held within the formal financial system.
Court jurisdiction and transfers
Property matters are typically heard in the Federal Circuit and Family Court of Australia, though cases may be transferred between Division 1 and Division 2 under sections 51, 52, and 149 of the Federal Circuit and Family Court of Australia Act 2021. These transfers can occur via a party’s application or on the court’s own initiative. While the Family Law Act 1975 applies nationally to married couples and most de facto couples, those in de facto relationships in Western Australia are governed by the Family Court Act 1997.
The division of complex assets
The court has broad powers under section 79 or 90SM to make and adjust orders regarding the division of property. This includes the ability to manage complex payment splits, such as those used for superannuation interests where assets may be divided among multiple former partners. Such mechanisms demonstrate the court’s capacity to handle assets that require precise splitting and timing for payment.
The disclosure risk
The primary difficulty is the transparency gap. While the Digital Currency Exchange Register tracks service providers, it does not track the individual holdings of users or assets held in private “cold” wallets. This creates a significant risk where one party may conceal assets that are invisible to traditional financial discovery.
Questions to consider
- Do you know which registered digital currency exchange services your partner has used?
- Are there other complex assets, such as superannuation, that require splitting under section 79?
- Is your matter currently in the correct division of the Federal Circuit and Family Court of Australia for the complexity of your asset pool?
This information is general in nature and does not constitute legal
advice. For advice specific to your situation, contact JB Solicitors.