Crypto currencies are a digital form of money. The currency can be transferred electronically from person to person, most often utilising blockchain technology. NFTs are unique, non-interchangeable units of data, and are quickly gaining traction as a popular way of investing in digital art, amongst other things.
Most of you will store your cash and bank cards in wallets. Similarly, crypto is also stored in a “wallet”, albeit slightly more complex. Wallets can either be digital, being wholly stored on the internet (referred to as a ‘hot’ wallet) or stored on a USB drive off the internet (referred to as a ‘cold’ wallet).
The attraction of crypto for a lot of people is that it is generally private. Your wallet is not connected to your name or personal information. Purchases, trades, or ownership of crypto are therefore difficult for third parties to identify or trace, This poses a particular challenge in family law, as there is the potential for crypto owners to take advantage of this in order to conceal or deny the existence of assets of substantial value which, if taken into consideration, may significantly alter the outcome of any property adjustment.
In family law matters, parties are under a duty of full and frank financial disclosure. This means that all parties to a family law dispute must provide each other with all information relevant to an issue in the case. If it is a family law property settlement, that will be all information about the assets, liabilities, finances and financial resources owned by each party – including crypto currency. Each party must disclose their full financial circumstances, extending to assets held by corporations, trusts, companies or other structures which are controlled by that party, or which that party has an interest in. Therefore, the obligation to make disclosure of crypto assets can’t be avoided simply because the “wallet” (hot or cold) isn’t linked to the owner’s name.
In family law disputes, it’s important to be aware of what to ask for. Your lawyer should request disclosure of any digital wallet, but also all transactions within that wallet – including conversion to fiat money (for example $AUD), but also conversions between cryptocurrencies. If disclosure of digital assets isn’t provided and there is sufficient other evidence to demonstrate that a party likely owns or did own crypto, a negative inference may be drawn against that person.
Whether it be digital currency, or digital artwork, this space will only continue to develop. Dobson Mitchell Allport’s Family Law Team understands the importance of staying abreast of this emerging area. If you want to know more about digital assets in family law, contact our specialist Family Law team at
