{"id":29610,"date":"2018-02-24T10:32:35","date_gmt":"2018-02-24T10:32:35","guid":{"rendered":"http:\/\/dominiclevent.com\/blog\/?p=29610"},"modified":"2019-04-17T17:13:59","modified_gmt":"2019-04-17T17:13:59","slug":"what-do-crypto-currencies-mean-for-divorce","status":"publish","type":"post","link":"https:\/\/dominiclevent.com\/blog\/what-do-crypto-currencies-mean-for-divorce\/","title":{"rendered":"What do crypto currencies mean for divorce?"},"content":{"rendered":"


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Divorce lawyers are now grappling with a whole new class of assets, writes <\/em>Mark Phillips<\/p>\n

Divorce lawyers in the UK are familiar with identifying, valuing and advising on the redistribution of many disparate types of asset: cash, bank accounts, investments, property, businesses, shareholdings, cars, yachts, or even horses \u2013 and whether held in this jurisdiction or off-shore, and whether held by an individual, a trust or a company.<\/p>\n

In cases of non-disclosure, lawyers can deploy the extensive forensic powers of the English divorce courts to compel disclosure, to order valuations and to penalise non-disclosing spouses for litigation misconduct.<\/p>\n

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.<\/p>\n

However, divorce lawyers (and the courts) are now having to grapple with a whole new class of assets, which by their very nature and design are elusive, untraceable and cryptic: Bitcoin and other digital currencies.<\/p>\n

The main challenges these present relate firstly, to the lack of traceability of digital currencies and secondly, their volatility and liquidity.<\/p>\n

If a spouse does not disclose a digital currency holding (whether voluntarily within negotiations, or by court order) then, unlike a bank account, a property, a shareholding or even an offshore trust, a crypto-asset cannot easily be traced and identified.<\/p>\n

It is symptomatic of the nature of Bitcoin and other crypto currencies that their very genesis back in 2008 \u2013 2009 is shrouded in mystery. Was the inventor a Satoshi Nakamoto, or Tesla and SpaceX founder Elon Musk, or some other anonymous, genius coder?<\/p>\n

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.<\/p>\n

The second challenge relates to the fair distribution of such an inherently volatile asset. Anyone can look up the value of a Bitcoin at any given time, but when determining financial settlements divorce courts have traditionally differentiated between distributing copper-bottomed (cash, bank accounts, houses) and risk-laden (business shareholdings) assets.<\/p>\n

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.<\/p>\n

Furthermore, 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 per cent of 18\u201324-year olds considered Bitcoin to be an attractive investment opportunity and of these 8 per cent stated that they had already invested.<\/p>\n

This same demographic are open-minded about the use of pre and post nuptial agreements to ring-fence assets \u2013 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 crypto currencies and their early adopters.<\/p>\n

\u00a0<\/p>\n

Mark Phillips is a partner in the Family team at law firm Royds Withy King. He can be reached by email: mark.phillips@roydswithyking.com<\/a>. Visit www.roydswithyking.com<\/a> for further information.<\/em><\/p>\n

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Divorce lawyers are now grappling with a whole new class of assets, writes Mark Phillips Divorce lawyers in the UK are familiar with identifying, valuing and advising on the redistribution of many disparate types of asset: cash, bank accounts, investments, property, businesses, shareholdings, cars, yachts, or even horses \u2013 and whether held in this jurisdiction … <\/p>\n

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