Cryptocurrency and divorce: how digital assets are treated in financial settlements

Cryptocurrency is very much mainstream. 

Once viewed as being solely for the tech savvy or for those willing to make more speculative or risky investments, digital assets like Bitcoin and Ethereum are now being bought by all sorts of individuals across all age groups. 

As the number of people involved increases, dealing with cryptocurrency in divorce and financial settlements is becoming increasingly common.

However, for separating couples the presence of crypto assets can significantly complicate financial disclosure and asset division. 

Johanna Brewer, head of Family Law at Wake Smith Solicitors looks at how this presents both legal and practical challenges and specialist knowledge, forensic investigation and strategic advice is required to resolve them.

This article covers:

• The growing importance of cryptocurrency in divorce
• Is cryptocurrency a matrimonial asset?
• The legal duty of disclosure
• The challenge of identifying and uncovering cryptocurrency in divorce
• Valuing cryptocurrency for divorce purposes
• How is cryptocurrency divided in a divorce?
• Tax and regulatory considerations
• Why specialist legal advice is vital in divorces involving cryptocurrency and digital assets

The growing importance of cryptocurrency in divorce

More and more people now hold digital assets as part of a diversified investment portfolio, whether through direct ownership, trading platforms or decentralised finance (DeFi) products. Some may have accumulated cryptocurrency years ago at relatively low cost and since then, its value could well have rocketed.

As a result, cryptocurrency is increasingly being recognised as a matrimonial asset and, as such, it must be considered part of the overall financial landscape in divorce proceedings.  As with all asset groups, failure to identify and properly value crypto can result in unfair settlements and long-term financial disadvantage.

Is cryptocurrency a matrimonial asset?

Under English and Welsh family law, the court has wide discretion to divide assets fairly, taking into account the circumstances of the case and the factors set out in section 25 of the Matrimonial Causes Act 1973.

Cryptocurrency is now generally treated in the same way as other forms of property or investment.  If it has been acquired during the marriage or used for the benefit of the family, it is likely to form part of the matrimonial pot.  However, even where crypto was acquired prior to the marriage its value and use may still be relevant, particularly in longer marriages or where assets have been intermingled.

Crucially, cryptocurrency must be disclosed fully and accurately in exactly the same way as bank accounts, shares or pensions.

The legal duty of disclosure

Both parties in financial remedy proceedings have a strict duty of full and frank disclosure.  This obligation extends to all digital assets, including:

• Cryptocurrency held in personal wallets
• Assets held on exchanges or trading platforms
• Stablecoins and tokens
• NFTs (non-fungible tokens)
• Profits from crypto trading or staking

Failure to disclose cryptocurrency can have serious consequences.  If hidden assets are discovered after a settlement has been reached, the court may make an order, impose costs penalties or draw adverse inferences against the non-disclosing party.

The challenge of identifying and uncovering cryptocurrency in divorce

One of the key difficulties with cryptocurrency in divorce is that digital assets can be deliberately or inadvertently concealed. Unlike traditional bank accounts, crypto can be held anonymously or across multiple platforms and wallets may not generate obvious paper trails.

This means that during the settlement process, family lawyers must use some very specific strategies to make sure all crypto assets are uncovered. These include detailed questionnaires and targeted disclosure requests, analysis of bank statements for transfers to crypto exchanges, reviewing tax returns and capital gains declarations and examining lifestyle and spending patterns. 

Experienced family solicitors know how to ask the right questions and spot the warning signs that cryptocurrency may exist but has not been disclosed. However, when things are less clear, they may need to bring in forensic accountants or digital asset experts to complete the picture.

Valuing cryptocurrency for divorce purposes

Valuation presents another challenge.  Cryptocurrency is notoriously volatile with values changing dramatically over short periods. This raises important questions.  What valuation date should be used?  How should fluctuations be accounted for?  Should assets be divided by value or by percentage of holdings?

In many cases, a specific valuation date will be agreed or ordered by the court, but careful legal advice is essential to ensure fairness, particularly where market volatility could disproportionately benefit one party over the other.

How is cryptocurrency divided in a divorce?

There is no single approach to dividing crypto assets.  The most appropriate strategy will depend on the wider financial picture, but the most common options include:

• Offsetting: One party retains the cryptocurrency while the other receives assets of equivalent value (such as property or savings).
• Shared ownership: Crypto holdings are divided between the parties allowing both to share future gains or losses.
• Liquidation: Assets are sold and the proceeds divided. This provides greater certainty but could potentially trigger tax liabilities.

Each approach carries its own risks and advantages which is why specialist legal advice is essential to align the division of crypto assets with each spouse’s wider financial needs.

Tax and regulatory considerations

Cryptocurrency is not tax-free. Capital Gains Tax may be payable on disposal, and this must be factored into settlement negotiations.  Timing of transfers, disposals and court orders can also have tax implications.

This is why family solicitors often work alongside accountants and financial advisers to ensure settlements are not only fair on paper, but also practical and tax-efficient in reality.

Why specialist legal advice is vital in divorces involving cryptocurrency and digital assets

As cryptocurrency becomes more common, digital assets are adding a new layer of complexity to divorce that cannot be ignored.  Without proper legal guidance, crypto assets may be undervalued, overlooked or unfairly allocated.

With the right legal advice, it is possible to navigate the complexities of cryptocurrency in divorce with confidence.  An experienced family lawyer will protect your financial position and achieve the fairest outcome by ensuring full and accurate disclosure, identifying hidden or undeclared digital assets, advising on valuation and division strategies and securing settlements that reflect both current and long-term needs.

Our experienced family law team advises clients nationally on all aspects of divorce.  If you would like to arrange a confidential initial consultation with one of our team, please contact us today.

If you would like to arrange a confidential initial consultation with one of our team, you do so online by clicking here, or call us on 0114 266 6660

For further information on our family law services click here

Contact us to book your free initial appointment (30 minutes) via email by clicking here

Published 28/01/2026