Erica and Francis DeSouza were a wealthy San Francisco couple who decided to get divorced. The negotiations were over the usual arguments over access to the kids, who got the house and the pension, but also something extra. Who got the crypto?

Theirs is considered the first “bitcoin divorce” where cryptocurrency was factored in the financial arrangement. After three years of legal wranglings, a San Francisco court found that Francis had not properly disclosed the currency – which had exploded in value – and ordered him to pay up more than £5m to Erica.

This happened in 2013, and family lawyers interviewed by i say Bitcoin divorces are increasingly happening here too. In the modern-day equivalent of stashing money in a mattress, most commonly, they involve one spouse who tries to hide money in cryptocurrency accounts, so they pay out less to their partner.

This has resulted in a growing industry of financial forensic investigators, who charge hundreds of pounds an hour to track down digital coins like bitcoin and ethereum on behalf of partners who are not convinced the numbers add up. Tens – if not hundreds – of millions of pounds have been uncovered this way, found on crypto platforms the partners had never heard of, or hidden on hard drives. 

Emily Brand, Partner and Head of Family says: One recurring problem is that because of the nature of the of the asset, it is extremely difficult for lawyers to prove that something exists without some heavy legwork. 

She described a scenario where one divorcing spouse was a non-dom, UK resident was going on luxurious holidays abroad, who would be asked to explain how they funded the trips.

“Then it all gets a bit knotty”, Brand explained. “One of the problems we have in the court is they are massively busy, and they don’t like fishing expeditions,” or requests for extra documents that the court does not believe there is sufficient evidence or time to go looking for. “Your client saying ‘we flew by helicopter to Monaco five times a year’ is not really great evidence.”

Read the full article in The i here.

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