Divorce lawyers battle over bitcoin as crafty cryptos play hide the asset
WARRING spouses are using crafty investments in cryptocurrencies like Bitcoin and Ethereum to ensure their partners are cheated out fair divorce settlements.
Now lawyers are being urged to be creative, flexible and adapt fast to try to find ways to trace funds being squirreled away by artful dodgers.
One leading London law firm says it has three cases before the English courts involving potentially hundreds of thousands of pounds worth of the currency.
Royds Withy King says it is advising three cases involving assets made up of cryptocurrency which have rocketed in value.
Bitcoin becomes hide & seek tool in divorce
And they’re advising spouses “seeking the disclosure and a potential share of cryptocurrency assets” with one woman claiming her husband sunk £80,000 of their shared assets which are now valued at £600,000.
Mark Phillips, a partner in the Family team at law firm Royds Withy King said: “When the computation of capital and incomes has been completed, the matrimonial pot can be divided by applying the notoriously discretionary Matrimonial Causes Act 1973.
“This is the law that governs English divorce and financial remedies and the root cause of London being viewed as the divorce capital of the world, as well as the venue for associated forum shopping.
“A mere suspicion that someone may have invested in digital currencies will be hard to evidence and difficult to prove.
“The English divorce courts can be hard to persuade to endorse costly fishing expeditions potentially involving teams of forensic accountants and IT experts.
“The reality is that divorce lawyers and the courts are going to have to be flexible and adapt fast to cryptocurrencies and their early adopters.
“Digital currencies, assuming that they have been disclosed or identified and then valued, belong to the outer and left-field end of the asset spectrum. Divorce settlements will need to accommodate this in the balancing exercise required to achieve fairness between spouses.”
Young people favour pre-nuptial agreements
Mr Phillips went on to say that attitudes to marriage and divorce are also changing.
Last month Coinlist.me reported that young people were by large margins more involved in cryptocurrencies than any other age group.
Mr Phillips added: “In the future digital currencies and block-chain technology are not going to go away. A recent UK survey by Coinlist.me revealed that 18 percent of 18–24-year olds considered Bitcoin to be an attractive investment opportunity and of these 8 percent stated that they had already invested.
“This same demographic are open-minded about the use of pre and post nuptial agreements to ring-fence assets – which might very well include valuable digital currency assets acquired before a marriage.
“The reality is that divorce lawyers and the courts are going to have to be flexible and adapt fast to cryptocurrencies and their early adopters.”