Three cases currently going through the courts are thought to be the first instance where cryptocurrencies, such as Bitcoin, may have been used to hide an individual’s wealth.
Lawyers have revealed the first such cases where cryptocurrencies were listed as assets, but how these assets will be dealt with by the courts is yet to be decided.
Courts currently have a number of powers to investigate hidden and undisclosed assets and freeze them.
However, unlike a traditional bank account, the Courts have no powers to freeze cryptocurrencies if they suspect a person is trying to hide assets as they are not regulated in the same way as a bank.
Also, unlike tangible assets such as high-value cars or artworks, cryptocurrencies are by their nature difficult to track.
It is thought that in some cases the Courts could appoint a forensic accountant or digital expert to analyse data when it is suspected that someone is trying to hide money in cryptocurrency – but whether this would be effective is not yet known.
It has been revealed in recent hearings that the Courts also don’t have any guidance on how to deal cryptocurrency as a result of its relatively new emergence.
The other complexity faced by both lawyers and the court is valuing cryptocurrencies, especially with the volatility that many forms of digital money are facing- what was once an asset worth £2 million, could be worth £1 million three months down the line.
While these cases remain relatively rare it is something that is worth considering before entering into a divorce with your partner.
Carter Lemon Camerons LLP solicitors is a City law firm which provides legal services with a personal touch covering the full range of family issues. For more information about our services, please contact Francesca Flood or telephone: 020 7406 1000.