Don't overlook crypto when splitting assets in divorce
In many ways, crypto functions like a digital offshore account — decentralised, borderless and often anonymous.
Its pseudonymous nature makes it uniquely difficult to trace, value, or even prove it exists. Unlike a share certificate or bank statement, a crypto wallet might exist on a USB stick in a drawer, or be locked behind a password and 12-word seed phrase known only to the holder. If someone claims they have lost access, that may be the end of the trail.
Even when crypto is disclosed, it still poses difficulties. These assets can be highly volatile, particularly altcoins, so unless both parties agree to share that risk, valuing them fairly becomes problematic. It is also relatively easy for someone anticipating divorce to open a crypto exchange account on a phone and quietly move funds there, sometimes years in advance. Yet disclosure typically only covers the past 12 months unless there is a clear reason to investigate further.
This murkiness creates a growing blind spot in divorce litigation. There is no consistent UK legal framework for disclosing crypto and limited case law to guide lawyers and judges. That opens the door to disputes and grey areas, particularly when disclosure is incomplete or suspected to be dishonest.
For international cases, the complexity increases significantly. If digital assets are held on overseas exchanges, especially in jurisdictions that do not co-operate with UK courts, there may be no practical way to obtain information or enforce a financial settlement. Tracing crypto that has been moved, converted into privacy coins, or hidden through tumbling services — a process of mixing identifiable funds with nonidentifiable — can be incredibly difficult and sometimes impossible without specialist forensic expertise.
Solicitors must look for tell-tale signs of concealment, undeclared exchange accounts or large unexplained transfers. And when red flags arise, lawyers increasingly rely on forensic investigators who understand blockchain analysis and can follow the money.
But it is not just a technical problem, it is emotional too. When one party believes assets are being hidden in crypto, it fuels mistrust and escalates conflict. Relatively straightforward financial cases become emotionally charged battlegrounds once digital asset concealment is suspected.
As more wealth is stored digitally, this will only grow as a challenge for the courts. Until the law catches up, crypto will continue to be a grey area that some exploit, others fear, and many don't fully understand.
For divorcing couples, the message is clear: do not underestimate the role crypto may be playing in the financial picture.James Maguire is the managing director of Maguire Family Law
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