Cryptocurrency has long been hailed as the financial frontier — volatile, fast-moving and largely unregulated.
But as bitcoin and its digital siblings become increasingly embedded in people’s financial portfolios, family lawyers face a rising and often overlooked challenge: crypto concealment in divorce.
In divorce cases among the wealthy, digital assets are no longer rare outliers.
As digital coins and tokens take up permanent residence in portfolios, one question is increasingly landing on family lawyers’ desks: can crypto be hidden in divorce, and can we ever find it?
The answer is complex. Unlike offshore bank accounts or bricks-and-mortar assets, the details of digital currencies do not live neatly in a filing cabinet.
They are fast-moving, decentralised and, in the wrong hands, deliberately elusive.
Crypto in divorce — a rising challenge
Over the past five to eight years, crypto has become a recurring feature in divorces.
What makes it so challenging is the difficulty in tracing and valuing digital assets compared to more traditional forms of wealth.
Often, the other party does not even know it exists.
Crypto can be held in different formats, including hot wallets (online and accessible via exchanges such as Coinbase or Binance), and cold wallets (offline storage which is far harder to track).
When stored in a cold wallet, the only access is via a seed phrase — a private key made up of 12 to 24 random words.
Without this, the wallet is virtually invisible.
This gives rise to serious issues in divorce.
How do you prove an individual owns crypto if there is no identifiable name or address attached to the asset?
While you can trace transactions on the blockchain, if the wallet was never linked to an exchange or the user took steps to cover their tracks — for instance, by using a mixing service or converting into privacy coins — even forensic specialists may struggle to identify the asset or prove ownership.
The disclosure dilemma
One major problem with crypto in divorce is the lack of regulation or guidance within the family law system.
Form E — used for financial disclosure in divorce — does not have a section dedicated to digital assets, which leaves room for crypto to be omitted, whether deliberately or unintentionally.
Crypto assets do not behave like standard financial products, and there is no box for a bitcoin wallet or ethereum stake.
This leaves a loophole — albeit a legal grey area — unscrupulous spouses may exploit.
With no clear disclosure category and little court precedent, there is scope for under-reporting or complete omission.