Bitcoin, ripple and other cryptocurrency assets are now part of divorce settlements

Crypto assets would form part of divorce settlements - as long as they can be found (Source: Getty)

Forget the plush pad, wine cellar or luxury car lot - bitcoin is now being fought over by divorcing couples.

Cryptocurrency assets are at the centre of three high value divorce cases for law firm Royds Withy King, but that number is expected to grow as digital assets become more mainstream.

“These are the first cases we have seen, and we expect to see many more. There will also be those divorces where a spouse may not have disclosed such assets leaving a traceability nightmare," said partner Vandana Chitroda.

Bitcoin, litecoin, ripple and ethereum are the crypto assets owned by the husbands in each of the cases.

One of the firm's cases involves an original investment of £80,000 in November 2016, which is now worth £600,000.

Other family law specialists told City A.M. that they had also started to see cases involving cryptocurrency.

"The difficulty we have is that it's not certain what power the court has to make orders over cryptocurrencies because it's not entirely clear what kind of property they are," said John Oxley, a divorce barrister at Vardags.

He added that it was usually easier for one partner to keep their cryptocurrency holding and to pay the equivalent value to the second party, since it is as yet unclear whether a judge can force a transfer.

But Deborah Jeff, head of family at Seddons, said it was fairer to attempt to split the asset.

"The value can change so dramatically that it’s usually advisable to share the value equally between the parties rather than allocate all the cryptocurrency to one spouse," she said.

Read more: £4bn is being laundered through cryptocurrencies

In some cases, identifying the cryptocurrencies people own - which could now be worth a significant amount from a small original investment as a result of rising prices - may end up being impossible.

Jeff added that it was likely more forensic and intelligence procedures will need to be developed to cope with the rise of the technology.

“Tracing cryptocurrencies could be enormously time-consuming and expensive," said another partner Royds Withy King, Mark Philips.

"This is, of course, much easier if cryptocurrencies are traded via an online investment platform and bought with funds from a bank account, as the original value of the transaction can then be established. When cryptocurrency is purchased directly and moved offline, it becomes almost impossible to trace,” he said.

"... the nature of these currencies make it very easy for one party to hide assets. Unless a spouse discloses an investment in cryptocurrencies, it is entirely possible for them to remain hidden," he continued.

Read more: Government websites have secretly been mining bitcoin

“Parties have a duty to provide full and frank disclosure of their assets during a divorce and if there is no disclosure or evidence of the existence of cryptocurrencies, it will be extremely difficult for a party to receive their fair share of the matrimonial assets."

When cryptocurrencies assets are identified as part of a case, the value must also be adjusted throughout as prices change when it comes to calculating settlements, the law firm said.

The value of bitcoin hit highs of nearly $20,000 late last year. It's now trading at $9,242 at pixel time, recovering somewhat from a major sell off.

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