Full and frank financial declarations upon divorce and the rise of crypto currencies – A growing problem for family law teams within the UK
Crypto currency and getting a fair divorce settlement for your clientWhen it comes to the courts in relation to the disclosure of marital assets, both parties have a duty to provide a full and frank disclosure. However, when it comes to cyber assets, if there is no evidence of cryptocurrency with either party, it could be very difficult to trace these highly volatile investments and their exact values. The problem exists when these assets are purchased directly and then moved offline. It could prove to be a very time consuming and costly task to forensically trace one parties offline investments, as they may have been moved offline soon after the trades has been placed. The types of crypto currency are growing daily, here are some of the most commonly traded: Ethereum Bitcoin
NEO Ripple IOTA Swiftcoin Namecoin Bytecoin Dogecoin Peercoin Emercoin Feathercoin Gridcoin Primecoin Dash Monero Does this create an issue for the spouse / legal adviser? In simple terms yes, unless proof can be obtained to ascertain holdings and values they may not be included within a divorce settlement and one side may well lose out financially as a result. Should you be asking for a declaration from the other party that they have no offline currencies? Certainly, as these may well come to light at a later stage, and due diligence should now be at the forefront of a legal practitioner’s mind. If your client is certain these currencies exist and are being excluded from the spousal declaration of assets, the courts can order a forensic tracing review of the spouses computers and other electrical devices. Freezing injunctions can be obtained on all assets if there is a concern about crypto currency being hidden or disposed of. However, the problem then still exists due to the decentralisation of where these assets are located. Vandana Chitoda and Mark Philips, family law practitioners at Royds Withy King recently stated on their website, that the rapid rise in cryptocurrency since its creation in 2009 and the wealth it has generated, means that digital currencies are likely to become a “frequent and significant feature” in modern day divorces. Here at Assured Wealth we are now receiving weekly instructions from legal practitioners across the UK, for crypto currency valuations to be included within pension sharing reports which contain a full financial analysis. If you would like to take advantage of our UK market leading divorce and pension sharing reports (Only £795 plus VAT), please contact us with your enquiry today.