More and more cases we are instructed on have a crypto element to them. Historically they have been in relation to criminal cases however more recently we are receiving enquiries from family solicitors with similar issues when dealing with divorce proceedings. We do not intend here to detail the workings of cryptocurrencies but highlight the major issues that repeatedly arise.
Some spouses are using cryptocurrency to hide money during divorce settlements. The first and hardest task is to identify that cryptocurrency is actually held by the spouse. Suspicion by one spouse may be the only evidence currently available and this may be because of past conversations or perhaps a change in lifestyle of one party. The Court has power to make a Search and Seizure order if compelling documentary evidence can be produced to the Court to show that a spouse owns cryptocurrency. This may take the form, for example, of historic text or email messages. Such orders are expensive and difficult to obtain but, once obtained, they may allow digital forensic experts access to the spouse’s computers and electronic devices and search for further evidence of cryptocurrency transactions in files, emails, browser histories, or search for login information for crypto accounts.
Other possible sources of evidence:
Beware, parties to divorce proceedings may not access their spouse’s computer or phone without authorisation.
Other evidential challenges:
The Courts have the power to re-open divorce settlements years afterwards if it can be proven that either party failed to disclose all his/her assets.
The key is about getting as much information as possible to evidence how the crypto assets have been purchased and finding the connection between the spouse and the asset.
Cryptocurrency valuations are notoriously volatile i.e. they are subject to significant swings in valuation. There are several solutions to deal with this problem such as:
Other valuation issues:
As the transacting and holding of cryptocurrency assets becomes more mainstream in the economy, the issues above are more likely to arise. Please contact Davidsons Forensic Accountants on 0113 483 1127 should you require any assistance with any of the issues highlighted above or email us at firstname.lastname@example.org
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