Emma Lawler
Once viewed as a niche or speculative investment, crypto assets are now becoming a popular component of wealth and investment portfolios, with research published by the Financial Conduct Authority (FCA) indicating that around 12% of UK adults own some form of cryptocurrency. Whilst average adult holdings are currently valued at a modest £1,800, broader projections suggest that the overall value of cryptocurrency in the UK could reach $900 Mn by 2033.
One of the consequences of this growth in digital wealth is that it will continue to play a more prominent role in divorce proceedings, and separating couples should not overlook even modest crypto asset investments when assessing their overall financial picture.
Do you have to disclose cryptocurrency in a divorce?
Unlike traditional investments, cryptocurrency is not subject to financial regulation in the UK, however, the FCA have announced that the regulation of crypto will be introduced in the UK from October 2027. As things stand, crypto can be held outside conventional institutions, transferred quickly across jurisdictions and, in some cases, obscured through multiple wallets or pseudonymous transactions. Establishing ownership of a particular digital wallet may require detailed forensic investigation.
In divorce proceedings, both parties are legally required to provide full and frank disclosure of all assets under the Matrimonial Causes Act 1973, and the court must consider all financial resources available to each spouse, regardless of how or where they are held. Crypto assets are therefore not exempt from disclosure as they are seen as personal property in the eyes of the law and should be treated the same as traditional assets. This includes cryptocurrencies such as Bitcoin and Ethereum, NFTs, online trading platforms and even valuable digital or metaverse assets.
Where cryptocurrency forms part of the asset base, a forensic accountant may be instructed to work alongside your solicitor to trace holdings, analyse transaction histories and confirm valuations. This can be particularly important where one party has greater control over, or technical knowledge of, the digital assets involved.
What happens if crypto assets are not disclosed in a divorce?
If there are concerns that crypto assets are being concealed or dissipated during divorce proceedings, the court has powers to intervene. In some circumstances a solicitor may apply for a freezing order to prevent further movement of assets while financial matters are resolved. In appropriate cases, the court can also order disclosure from cryptocurrency exchanges to assist with tracing and identifying digital holdings.
These remedies provide important safeguards and reflect the courts’ increasing awareness of digital wealth within family law disputes.
How are crypto assets valued during divorce proceedings?
One of the key difficulties with crypto assets is volatility. Cryptocurrency values can fluctuate significantly over short periods, making valuation more complex than with traditional property or savings.
The family courts are, however, well‑versed in dealing with fluctuating assets and judges have wide discretion to adopt practical solutions that promote fairness, including selecting appropriate valuation dates or applying offsets elsewhere in the asset schedule to balance risk. In some cases, the court may allow one party to retain cryptocurrency holdings, recognising that they also assume the associated market risk.
Where substantial digital wealth is involved, expert accounting evidence is often essential. Experts can explain valuation methods, market behaviour and transaction evidence, enabling the court to make informed decisions.
Can crypto assets be covered by a pre‑nup or post‑nup?
Pre‑nuptial and post‑nuptial agreements offer an effective way of managing how cryptocurrency and other digital investments and asset should be treated if a marriage breaks down. Such agreements can set out how assets will be valued, divided and whether future gains or indeed losses should be shared.
Evidencing intentions in relation to future division of assets on divorce, properly prepared nuptial agreements carry significant influence over the court and can dramatically reduce uncertainty and conflict, particularly where one or both parties expect to accumulate digital wealth over time.
How to disclose crypto assets on Form E
For those handling their own divorce, it is important to note that Form E does not currently contain a dedicated section for digital assets. Any cryptocurrency holdings must therefore be clearly identified elsewhere within the disclosure. Failure to do so may result in assets being excluded from the settlement, leading to serious consequences if non‑disclosure is later uncovered. Using a solicitor to assist with your divorce is the best way to ensure that full disclosure takes place.
Key takeaways: cryptocurrency and divorce
Although cryptocurrency may feel unfamiliar or complex, the legal position is clear. Digital assets are treated as property and are subject to the same principles of disclosure, valuation and distribution as any other form of wealth in divorce proceedings. With the right advice and specialist support, crypto assets can be dealt with transparently and fairly as part of a financial settlement.
Contact our team today if you need guidance on financial arrangements and divorce.