Divorcing couples may clash over Bitcoin

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    Marriage and financesImage copyright Getty Images

    Divorcing couples are being warned to disclose all their assets amid fears that some may use digital currencies such as Bitcoin to hide their wealth.

    Lawyers suggest that the anonymous nature of these digital currencies could prove tempting to those involved in an acrimonious split.

    One solicitor said she had seen the “first wave” of cases where crypto-currencies were listed as assets.

    Courts have wide-ranging powers to investigate hidden assets.

    This could include a court appointing a digital forensic expert to analyse data when it is suspected someone is trying to hide money in cryptocurrency,

    Vandana Chitroda, a partner at law firm Royds Withy King, said it was dealing with three cases in which the husband had bought crypto-currencies such as Bitcoin, Litecoin, Ripple and Ethereum.

    “These are the first cases we have seen, and we expect to see many more. There will also be those divorces where a spouse may not have disclosed such assets, leaving a traceability nightmare,” she said.

    Jacqueline Fitzgerald, partner at Wilsons law firm, said: “Proving that one spouse has a substantial holding in a cryptocurrency and adding that to the marital assets can be a big problem.”

    Image copyright Getty Images

    The fact that there is no centralised system or opportunity to freeze these assets could cause difficulties, she suggested. This potentially made cases trickier than those when people tried to hide art or antiques, which were more easily traced.

    There was also a lack of guidance from the courts as to how these issues should be dealt with, mainly owing to the relatively recent emergence of mainstream cryptocurrency investment.

    There is no specific guidance from the Ministry of Justice, but the Advice Now guide, drafted by the Family Justice Council, says that both parties “need to be honest about what you own and what income you have”.

    Ms Chitroda said that lawyers and their advisers, like many of their clients, had little experience in recovering and valuing these cryptocurrencies.

    In one of the cases her firm is dealing with, an original investment of £80,000 in November 2016 was valued at £1m in December 2017 and was now “worth” £600,000.

    She said that the divorce process took eight months on average, so numerous valuations would be needed for the court to be given accurate information.

    View the original article: http://www.bbc.co.uk/news/business-43070849

    http://www.bbc.co.uk/news/business-43070849

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