Divorcing couples may clash over Bitcoin

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Disassociating couples are being warned to disclose all their assets amid concerns that some may use digital currencies such as Bitcoin to hide their capital.

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

One solicitor said she had watched the «first wave» of cases where crypto-currencies were listed as assets.

Courts suffer with wide-ranging powers to investigate hidden assets.

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

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

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

Jacqueline Fitzgerald, mate at Wilsons law firm, said: «Proving that one spouse has a substantial repulse in a cryptocurrency and adding that to the marital assets can be a big problem.»

The fact that there is no centralised way or opportunity to freeze these assets could cause difficulties, she proffered. This potentially made cases trickier than those when in the flesh tried to hide art or antiques, which were more easily tracked.

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

There is no specific guidance from the Sacred calling of Justice, but the Advice Now guide, drafted by the Family Justice Council, says that both advocates «need to be honest about what you own and what income you have».

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

In one of the cases her unyielding is dealing with, an original investment of £80,000 in November 2016 was valued at £1m in December 2017 and was now «usefulness» £600,000.

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

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