Life and therefore divorce are complicated in the digital age. In the old days, it was harder to hide assets if you were getting divorced because there was normally a paper trail relating to the purchase of investments. Alternatively, there was reference in a spouse’s bank accounts to dividend income from which shared ownership could be traced.
However, nowadays top London divorce solicitors
are grappling with managing financial disclosure and ownership of bitcoin and other cryptocurrencies in divorce
and financial proceedings. The problems created by cryptocurrencies and divorce
are being felt particularly hard in London, a city renowned for not only being a leading financial power player but also for its divorce courts
generosity to the economically weaker party to a marriage. Top London divorce solicitors
say that is why the wives of oligarchs and entrepreneurs have always tried to claim London and the UK as the jurisdiction for divorce
As cryptocurrencies are unregulated, they offer more anonymity than other types of assets or investments. That is why they may present difficulties on divorce
when a spouse fails to disclose assets. Top London divorce solicitors
recommend the early instruction of an expert divorce
solicitor working, if necessary with asset tracers, forensic accountants and digital investigators.
How can OTS Solicitors help?
If you need expert legal advice on financial disclosure and asset tracing, your financial settlement options or representation in financial court proceedings then the divorce
and family law
team at OTS Solicitors can help you.
For a confidential discussion on how OTS Solicitors can help you please call us on 0203 959 9123.
Can my spouse hide Bitcoins and other digital currencies from me in our divorce and financial proceedings?
The best London divorce solicitors
will tell you that whilst it is possible for a husband or wife to hide bitcoin or other digital currencies in financial negotiations, family mediation or even financial court proceedings, they should not do so.
In financial negotiations and court proceedings, a husband and wife are under a duty to provide full and frank financial disclosure. Unfortunately, given the nature of bitcoins they are easier to hide than property, other forms of investment or a yacht.
What can you do if you think that your husband or wife is hiding Bitcoins because of the divorce?
The first step that the best London divorce solicitors
will take is to discuss the reasons why you believe that your husband or wife is hiding bitcoins or other cryptocurrencies from you.
Evidence could be:
• A history of investing in bitcoin or other cryptocurrencies but the spouse is saying that he or she no longer invests;
• A paper trail from the spouse’s financial disclosure showing a withdrawal from an account thought to be for investment purposes but no corresponding purchase of property or disclosed shares or bank accounts or bonds;
• A document trail showing an investment into an online investment platform or cryptocurrency exchange and the subsequent non-traceability of the original investment;
• A history of failure to disclose bitcoins, for example hiding bitcoin from a former spouse in a previous financial settlement or from a business partner;
• Lifestyle thought to be inconsistent with stated means and income.
None of the above types of evidence are “concrete” evidence of bitcoin or other cryptocurrencies but it is very hard to find paper evidence of bitcoins.
Top London divorce solicitors
can recommend the use of a forensic accountant or digital investigator or asset tracking service to try to find bitcoins. The important thing is to weigh up the cost of instructing the expert, the amount you realistically think might be hidden in bitcoin or in other cryptocurrencies, and the benefits to be gained. The best London divorce solicitors
can help you in evaluating the cost benefit analysis of pursuing bitcoins you believe to be hidden. For example, a divorce
solicitor will talk to you about the relevance of the cryptocurrency assets if you have only been married for a short period. Alternatively, if your spouse’s wealth is of such size that even without taking the bitcoin into account the financial settlement will exceed your needs, you may take a view on the need to pursue bitcoin financial disclosure.
What can the court do if the judge thinks bitcoins have not been disclosed in financial disclosure?
When a husband or wife start financial court proceedings they each have to file a comprehensive document called a Form E setting out their assets. They should disclose any bitcoin or other cryptocurrencies in their Form E. If they do not do so, their spouse has the opportunity to file a questionnaire asking the judge to allow him or her to ask additional questions about the missing financial disclosure.
In addition, a judge at the first directions appointment hearing can authorise the commissioning of expert reports to investigate assets. A judge can also order the filing of statements of evidence about the bitcoins to help the judge at the final hearing of the financial application make a decision about their existence and relevance.
What happens if a spouse does not disclose bitcoins in a divorce?
If a spouse does not disclose bitcoins or any other asset as part of their financial disclosure they could be:
• Guilty of contempt of court for not being honest when completing their Form E, questionnaire or statement of evidence or when giving oral evidence at the final hearing of the financial application;
• Penalised in costs orders;
• If there is evidence that a spouse has deliberately disposed of assets to defeat a financial claim the court can make freezing orders;
• Penalised by the court in financial proceedings by the judge considering that the failure to disclose is conduct that the court should take into account when deciding what financial court orders to make;
• Penalised by the court in financial proceedings by the judge making inferences about their hidden wealth and bitcoins when giving judgement and dividing the family assets. In some cases where a judge has believed that a spouse has hidden wealth the judge has given the economically weaker party more of the disclosed wealth.
How can OTS Solicitors help?
For pragmatic expert advice on your financial settlement options or representation in financial court proceedings please call OTS Solicitors on 0203 959 9123 for a confidential discussion about how the divorce and family finance team at OTS Solicitors can help you.