Dividing assets and properties is a central issue in Financial Remedy proceedings during divorce and the dissolution of a marriage. In these proceedings, it is commonplace that assets such as investment portfolios are disputed between parties. With the rapid growth of technology and new investment opportunities, cryptocurrencies and assets such as Bitcoin and Etherum have become an increasingly prevalent assets to consider during family proceedings.
As of November 2025, 7 million individuals in the UK currently hold some form of Crypto asset, whether these individuals be seasoned traders or a part-time “have a go hero”, another layer of complexity is indefinitely added to the division of matrimonial assets.
In January 2022, the Law Society (in conjunction with Tech London Advocates) released guidance stating that “…there are (with only slight exaggeration) almost as many definitions of a cryptocurrency as there are cryptocurrencies”. Considering this, and the very nature of the assets being extremely volatile, unregulated and ever-changing value, it is becoming increasingly important for practitioners to identify and address these types of assets at the soonest opportunity.
With parties to financial proceedings having a duty to undergo full and frank disclosure, information for Crypto holdings should be made clear from the outset. Once disclosure has been forthcoming, for the purposes of classifying Cryptocurrencies, these types of assets have been considered as “property” in England and Wales. Notably, in the recent cases of AA v Persons Unknown [2019] and Ruscoe v Crytopia [2020], it was determined that crypto currencies and assets met the Ainsworth criteria, as follows:
- Definable and Identifiable: The Public Key (similar to an Account Number attributed to any bank account or building society) allows you to access the blockchain to denote the volume held. The Private Key (similar to a PIN code for any bank account or building society) denotes ownership.
- Capable of assumption: Crypto currencies and assets are actively trading on the open market.
- Permanence: Crypto currencies and assets are stored on an immutable digital ledger or the blockchain.
Cryptocurrencies and assets are therefore subject to the very same Property Adjustment Orders under s.24 of the Matrimonial Causes Act 1973 and Injunctions under s.37 of the Matrimonial Causes Act 1973. That said, due to cryptocurrencies and assets being largely unregulated, they should be approached cautiously and vastly different to that of physical property, despite being the same classification of typical tangible property. Furthermore, specific and clear directions must be sought when dealing with these types of assets.
It is therefore important to understand and consider how Cryptocurrencies and assets operate and work.
How are Cryptocurrencies held?
Unlike central banks, Cryptocurrencies are widely unregulated by government and there is no obligation to have an identity associated with a reputation of secrecy attached. This anonymity can open the door to serious issues such as tax evasion and money laundering, high-profile stories such as fraudulent trading are routine with many Crypto moguls facing indictment in the US.
Whilst they can be loosely quantified as ‘real-world’ currency, they are solely a digital asset and stored in a blockchain network– this is an equivalent of a typical bank ledger. Instead, the investor possesses a ‘hot wallet’ to access the blockchain. The purpose of the wallet is to allow the investor to access the blockchain network to buy, sell and trade globally.
Each wallet has two keys: a ‘public key’ similar to that of an account number, and a ‘private key’ similar to that of a PIN number. The former is shared publicly, and the latter is confidential.
Cryptocurrencies and assets may also be stored in a ‘cold wallet’. This is essentially Bitcoin, Ethereum, Dogecoin etc, that is held on external hard drives. It is important to identify these forms, to allow sufficient time for the devices to be delivered up and forensically examined by an expert. Though not as common, recent events of a gentleman that erroneously disposed of a ‘cold wallet’ worth approximately £600 million at a Welsh landfill, serve as a cautionary tale for all parties to carefully consider whether they hold a ‘cold wallet’.
Either variant of wallet can either be ‘custodial’ meaning this is controlled by external exchanges or ‘non-custodial’ where the individual is responsible for exchanges. Similar to that of the management of typical Stock and Shares ISA or Hedge Fund.
How may a party trace or uncover the location of crypto?
To some extent, Crypto can be regarded as transparent; the balance and transaction history can be traced via the blockchain that is accessible to the public and can be monitored using blockchain explorers such as “coinstats.ap”.
If the existence of Crypto holdings are disclosed at an early stage, an expert report should be considered to examine the history and projections of its value.
Due to the anonymity offered by Crypto trading, it can present a challenge to locate assets should information not be forthcoming during disclosure. It is important to ascertain the following when disclosing or receiving disclosure of Crypto assets:
- What type is the asset? (Bitcoin, Ethereum, Meme coin, Dogecoin etc.)
- What type of wallet? Hot or Cold?
- What is the volume held? Usually shown as a decimal of 1.
- What was the value at purchase? This is particularly important when considering Capital Gains Tax, which the sale of any crypto asset is subject to.
- Is the asset held solely or jointly?
- How is the asset controlled, custodial or non-custodial?
It may be relevant, at the point of disclosure, to consider a court order or injunction, for example for devices to be delivered up for inspection or freezing injunctions to prevent the asset from being dissipated. Additionally, with supporting evidence, a party can make an application to the court for an order requesting updating disclosure due to the ever-changing nature of the asset. Updating disclosure must be provided in a timely manner and at regular intervals throughout proceedings, with clear time and date marked evidence.
Ultimately, it is vital to flag or query the existence of Crypto assets at the earliest opportunity to seek court directions accordingly, with the assistance of Counsel or legal representation.
If a party has suspicion of the existence of Crypto holdings, further and detailed investigation will be required. In this event, parties must be prepared for costly and extensive litigation. Should the opposing party present themselves as uncooperative or fail to entertain any reasonable queries to account for Crypto, then the court may be invited to draw adverse inferences in accordance with Moher v. Moher [2022] EWFC 22.
A detailed investigation of a party’s financial landscape is chiefly required in any event, and parties must pose specific and sweeping questions in Questionnaires and Deficiencies thereafter. As mentioned previously, parties should consider instructions to an expert to trace and review Crypto holdings.
How to deal with cryptocurrencies in financial remedy proceedings?
As of November 2025, the value of 1 Bitcoin is valued at roughly £65,000.00. However, this sum could increase or decrease substantially; with investors either ending the day as millionaires or ending the next without their entire life savings.
Though it must be borne in mind the tax implications, upon division, as any sale may be subject to both Capital Gains Tax. Additionally, the mining (creation) of crypto assets may be subject to Income Tax. This article should most certainly not be taken as taxation advice, and it would be strongly advised that all parties obtain advice from a specialist tax advisor to understand their tax liability at the onset of divorce proceedings.
As such, it is important to seek expert advice and valuation, with updated disclosure regularly provided throughout proceedings. Furthermore, the process applied to issues concerning Crypto assets can vary dependent on the facts of the case. With Cryptocurrency disputes being a relatively new phenomenon in the family courts, it is best to treat the existence of crypto assets with caution and to seek expert advice urgently.
How may cryptocurrencies be distributed following litigation or mediation?
In accordance with the overriding principles of the Family Procedure Rules, it is important that both parties apply themselves to proceedings expeditiously and fairly, it is therefore key that full and frank disclosure take place to allow parties to quantify crypto assets. If necessary, divided in the same way as other property assets. It is always encouraged by the court that this be done by negotiations and mediation without the need for costly and somewhat stressful litigation.
Should inter-party negotiations fail, court resources may be sought as a last resort, and the normal processes be listed through to a Final Hearing.
The findings in the recent case of DH v. RH [2024] EWFC 79 before The Honorable Mr. Justice MacDonald, demonstrate the difficulties parties and the Court have when determining the division of Crypto assets.
In this case, the wife had worked for Lehman Brothers before the birth of the children but had not worked since. She was held to have a modest earning capacity. H had been in Banking but since termination of his employment he had been living off saved capital and intended to operate as a niche private investor. H held cryptocurrency funds and private equity investments. They had agreed to set aside money to fund tertiary education for the children.
The parties filed for divorce and Financial Remedy proceedings pursued not shortly after.
W asserted in these proceedings that H had not disclosed £178m in cryptocurrency. The court found while H should be deprecated for inaccurate disclosure, he had not entirely failed to disclose assets, with the true assets being some £12m net.
A theme throughout proceedings was Ws assertions that H held considerable crypto assets and had failed to disclose this ‘pot of gold’. In this case, a cryptocurrency expert was instructed to produce a report. The expert’s report determined that H had disclosed all he could, but prefaces his report by noting, “it is not possible to say from that information (the blockchain) alone who owns the wallet and who is engaged in the transactions”.
In his findings MacDonald J noted, “In the context of the open market, it is impossible to be certain whether the proposed point of sale is advantageous or disadvantageous”. Ultimately, it was ruled that Hs “remaining cryptocurrency shall be shared equally between the parties in specie” taking into account the parties’ income and housing needs.
Conclusion
Cryptocurrency is certainly a new phenomenon for family proceedings let alone the global financial scene. A phenomenon that has rocked global finances to its core. It is important for all parties in financial remedy proceedings to forego full and frank disclosure and ensure holdings of crypto assets are disclosed at the soonest opportunity to determine the value and to allow parties to move toward a prompt settlement.
Recent case law demonstrates the courts’ cautious approach when dealing with the division of Crypto assets. As such, it is vitally important that both parties acknowledge the financial risks and consequences upon transfer or sale of crypto assets. Furthermore, both parties must seek the advice of a financial advisor or crypto expert upon the issue of financial remedy proceedings.
It is therefore important to seek and obtain specialist advice from a Solicitor in addition to a financial advisor to best prepare and protect your financial position in readiness for Financial Remedy proceedings following divorce.
To speak to a member of the DTM Legal Family Law team, email family@dtmlegal.com or call 01244 354800 / 0151 321 0000.
