The purpose of this blog is to give the reader information about the implications of crypto-assets in cases involving divorce and the dissolution of civil partnerships. As matrimonial lawyers, we are seeing crypto-assets with increasing frequency, and it is therefore important that we are able to advise our clients in relation to their implications, and also explain these to the Court where necessary.
What is a cryptocurrency?
A cryptocurrency is a digital or virtual currency. An example of a cryptocurrency is Bitcoin. As at 20th April 2021, according to Google, 1 Bitcoin was worth just over £40,000. Crypto-assets can therefore be extremely valuable.
How are crypto-assets considered in law?
Crypto-assets are considered in English & Welsh law as property. However, some jurisdictions treat crypto-assets as currency.
What orders can the Court make in relation to crypto-assets?
As crypto-assets are considered as property, property adjustment orders can be made against them under the Matrimonial Causes Act. This means that the Court can order the transfer of a crypto-asset from one party to the other, or order the sale of a crypto-asset and a division of the net proceeds.
In addition to this, if a person anticipates that a party is likely to dispose of their crypto-asset, to intentionally defeat their claim, then a freezing injunction may be made. This means that the Court can make an order preventing a party from disposing of, or dealing with their crypto-asset, without a further order of the Court.
If a party does intentionally dispose of their crypto-asset, to defeat the other parties’ claim, then there are now tracing firms who can trace back crypto-assets, where necessary.
What if the holder of the crypto-asset refuses or fails to comply with the order made?
If there are other assets held by the holder of the crypto-asset, then enforcement may take place against those assets, if necessary.
If you are going through divorce or separation and require advice concerning crypto-assets or other financial matters, contact us to speak with one of our specialist family lawyers.
T: 029 2034 2233
E: enquiries@wendyhopkins.co.uk
Author: Sam John
Published: 20/05/21