The price of some cryptocurrencies such as Bitcoin has reportedly surged again this week following reports that Amazon is recruiting in this field, prompting speculation that Amazon might soon be accepting payment by cryptocurrency.
As increasing numbers of people (an estimated 2.3m in the UK) are now reported as owning cryptocurrency, the time has come for family lawyers and judges to grapple with the ownership and valuation of such assets following a divorce.
My recent article, together with my commentary in the Financial Times and the Telegraph, provides some helpful observations and tips for those contemplating or currently engaged in divorce proceedings involving cryptocurrency holdings.
Those among the increasing number of people who own cryptocurrency and who are also contemplating marriage or a civil partnership should also be aware of the wide-ranging powers of the English courts to deal with all classes of assets, including crypto holdings, following a divorce. Thus, if your Bitcoin holding has recently increased in value exponentially, it certainly needs to be declared in your pre-nuptial agreement in order to stand any chance of being protected following a subsequent divorce. Failure to declare assets could render the pre-nuptial agreement invalid in this country; whilst such agreements are not automatically upheld, they carry significant weight in the English courts provided that certain safeguards have been met, such as full disclosure having been made by both parties.
Although it is often difficult to put a value on crypto assets due to its huge volatility, it is vital to declare the size of your holding in your pre-nuptial agreement, and to make it clear that any future growth in value is to be ring-fenced and protected in the event of a divorce.