Crypto currency and their impact within Divorce Proceedings

Feb 16, 2023

The Family Team at Herrington Carmichael is advising more and more couples in divorce proceedings, where one or both of the couple have invested in crypto currency or non-fungible tokens (NFTs).

What are crypto resources and what is crypto currency?

They are a digital form of money created through algorithms and cryptography.
Cryptocurrencies can be used to purchase goods and services, or they can be owned simply as an investment.

What are NFTs?

NFTs are digital assets that are unique and indivisible, making them ideal for representing ownership of digital items such as artwork, music, or digital collectibles. They are stored on a blockchain (see below), providing a secure and transparent way to track ownership and validate authenticity.

What is a blockchain?

A blockchain is like a big digital record book or giant list that can store information about things like who owns what and when something happened. Everyone can see the transactions on a public blockchain (e.g Bitcoin / Transactions — Blockchair), but no one can change it. The transactions are however anonymous.

Where are blockchains kept?

Blockchains are stored on computers all over the world. These computers work together to form a network. Each computer on the network stores a copy of the blockchain, and all the computers work together to ensure that the records are accurate and up to date.

Why do crypto currencies exist?

They were invented by “Satoshi Namamoto” (a pseudonym) to provide a secure and anonymous way to store and transfer value. It was a reaction to the worldwide economic crash of 2008. They are decentralised to make sure that no single entity or government is in control of them. They are intended to provide a secure, decentralised way to store and transfer value without the need for a third-party intermediary.

Can my spouse hide their cyber currency?

In financial remedy proceedings each party to proceedings has a duty of full and frank disclosure, both to each other and to the Court.

A family lawyer’s role is to help navigate you through the disclosure requirements and to help broker a deal based on the evidence of the resources which belong to a party or to which they have access. We help broker deals once we are sure that all the resources have been disclosed and that valuations have been agreed.

A failure to disclose the existence of a resource will place the offending party in contempt of court. At best, the court will draw adverse inferences and at worst, could punish the offender with imprisonment.

If you suspect dishonesty, there are a few companies offering tracing services. You need to make sure any expense is justified and proportionate. You do not want to spend more than the value of the resource establishing its potential existence and value.

How will the court deal with the crypto resource?

The volatility of the crypto market means that the court needs to be quite novel and creative to work out the best way of establishing the values of these resources. They can fluctuate massively from week to week. If you are negotiating an agreement at court, you need to be sure of the value of the resource especially if trading it against another less volatile resource.

The court may be minded to redistribute each type of resource, rather than determining an outcome that sees one party retaining all the risk-laden crypto resources.

If you would like to discuss financial matters, following the breakdown of your relationship, or prior to entering into a new one, with one of our expert family solicitors, please contact us and a member of our family team will be pleased to assist.

This reflects the law and market position at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought in relation to a specific matter.

Aaron O’Malley

Aaron O’Malley

Senior Solicitor, Family Law

Latest News & Insights

All in a Day’s Work: Employment Podcast Series

Our Employment team bring you a monthly podcast covering all aspects of Employment law for businesses and individuals. You can browse our podcasts below…
All in a Day’s Work: Introduction to TUPE

All in a Day’s Work: Introduction to TUPE

In this episode, we discuss the basic principles of TUPE including when a transfer arises, the impact this has on employees and how best to prepare for a potential TUPE transfer.

Top Legal Insights

 

Contract Law

Material Breach of Contract

What is a ‘material’ breach of contract by a party to a commercial contract? This is a critical issue regularly considered by the courts. What constitutes a material breach and what are the remedies?

Property Law

Commercial Lease: The Financial impact on Landlord and Tenant

Coronavirus (COVID-19) and the restrictions now in place to control its spread, are having a significant effect on many business sectors.

Divorce and Family Law

Divorce in Lockdown: Can I get some discreet legal advice?

We have spoken to clients who are unfortunately experiencing some family issues, and would like to obtain expert legal advice, yet don’t know how...

Land & Property Dispute

Restrictive Covenants – The Price of Modification

Having identified that your land is burdened by a restrictive covenant and for the purposes of this article the covenant in question will be that only one residential building can be erected on the land. What do you do next?

Wills, Trusts and Probate

Why is having a will so important?

It is entirely up to you if and when you want to create a Will, but it is important to be aware of the consequences of not having a Will.

Award winning legal advice

Herrington Carmichael offers legal advice to UK and International businesses as well as individuals and families. Rated as a ‘Leading Firm 2023’ by the legal directory Legal 500 and listed in The Times ‘Best Law Firms 2023’. Herrington Carmichael has offices in London, Farnborough, Reading, and Ascot.

+44 (0)1276 686 222

Email: info@herrington-carmichael.com

Farnborough
Brennan House, Farnborough Aerospace Centre Business Park, Farnborough, GU14 6XR

Reading (Appointment only)
The Abbey, Abbey Gardens, Abbey Street, Reading RG1 3BA

Ascot (Appointment only)
102, Berkshire House, 39-51 High Street, Ascot, Berkshire SL5 7HY

London (Appointment only)
60 St Martins Lane, Covent Garden, London WC2N 4JS

Privacy Policy   |   Legal Notices, T&Cs, Complaints Resolution   |   Cookies  |   Client Feedback   |  Diversity Data

 

 

Our Services

Corporate Lawyers
Commercial Lawyers
Commercial Property Lawyers
Conveyancing Solicitors
Dispute Resolution Lawyers
Divorce & Family Lawyers
Employment Lawyers
Immigration Law Services
Private Wealth & Inheritance Lawyers
Startups & New Business Lawyers

Pay Online >

Please be aware that we have no plans to change our bank details. If you receive any indication that any of our bank details have changed please contact us before sending us any funds. We take no responsibility for monies you transfer into the wrong bank account.

© 2023 Herrington Carmichael LLP. Registered in England and Wales company number OC322293.

Herrington Carmichael LLP is authorised and regulated by the Solicitors Regulation Authority with registration number 446245.