The UK is seeing a rise in divorce cases where one spouse uses cryptocurrency — most often Bitcoin — to conceal assets and avoid their division, according to the Financial Times. The issue is becoming more pressing due to the anonymity of digital wallets and the lack of centralized ownership registries.
Everything Can Be Hidden From Origin to Volume
According to Harriet Errington, a partner at law firm Boodle Hatfield, cases where wives cannot prove the existence of their former husbands’ crypto holdings have become “a new norm in the digital age.” The problem is compounded by the fact that blockchain networks do not require users to provide names when registering or using a wallet, and transaction data is not linked to specific individuals.
What Matters to the Court Is the Entry and Exit From Crypto
The main tool for investigation in such cases is the analysis of traditional financial documents: bank statements, income reports, and card transactions. If evidence emerges of cryptocurrency purchases through exchanges, payment systems, or even Bitcoin-based purchases, it may justify a court order for disclosure.
A chain of evidence can be built through digital footprint analysis: blockchain transactions, mentions in communication, and records of purchases funded by crypto proceeds. The court may recognize the existence of crypto assets even without direct proof of ownership if the available evidence is compelling enough.
Liability for Concealment and Consequences Years Later
Courts in England and Wales are granted broad authority. If it is established that a spouse concealed assets, they can issue rulings for the transfer of other property or reopen the case years after the divorce. Penalties may include fines or even imprisonment for submitting false financial information.
Tax return analysis plays a key role in identifying crypto traces. The conversion of digital assets into fiat typically involves tax obligations — such transactions must be reported as capital gains. The absence of such data in tax filings can serve as indirect evidence of income concealment.
It is important to note that a spouse is not legally allowed to access the personal devices of the other — such as a phone or computer — without consent. Doing so may lead to criminal charges. All evidence must be obtained lawfully and properly documented.
Hiding Becomes Increasingly Difficult
Lawyers warn that as cryptocurrency adoption spreads, it is becoming increasingly difficult to remain truly anonymous. Heightened oversight, new reporting requirements, and the growing body of legal precedent make attempts to hide assets more risky.
As cryptocurrencies continue to be integrated into daily transactions, courts are gradually building experience in handling digital assets. Lawyers note that this is no longer a blind spot in divorce proceedings — it is now a new legal frontier where honesty may not always provide an edge, but “lies will certainly no longer go unnoticed.”
This post is for informational purposes only and is not an ad or investment advice. Please do your own research making any decisions.