Mining for the hidden millions in relationship breakups

As Kim Kardashian’s legal drama All’s Fair hits screens with its glossy spin on the world of high-stakes family law, audiences are promised a heady mix of glamour, high-stakes breakups and complex asset wrangling. Away from the screen, real-life divorce lawyers are facing plot twists that no screenwriter could dream up as cryptocurrency and other digital assets rewrite the rules of disclosure and division in modern divorce.

Whether it’s Bitcoin, Ethereum, Elon Musk’s favourite DogeCoin, or a more obscure alt-coin, digital currency is no longer just for tech enthusiasts. Crypto has gone mainstream and increasingly is taking a leading role when disputes reach the family courts. Research by the UK’s Financial Conduct Authority found that around 12% of UK adults owned crypto in 2024, up from 4% in 2021.

“We’re seeing more cases where one party suspects the other is hiding money in crypto wallets,” said Philip Elliott, a family law specialist at Bedford-based firm Sharmans. “And unlike a bank account or property, crypto can be very hard to identify if someone doesn’t want to disclose it – and even harder to value.”

Philip added: “Cryptocurrency offers a tempting way to mask wealth during divorce. It’s easy to purchase, relatively unregulated, and doesn’t require the help of a financial adviser or institution. For those who don’t want to share fairly, it can act like a virtual offshore account, but without the travel costs.”

While UK law requires full and frank financial disclosure, current systems rely heavily on honesty. Most divorcing couples are only required to share financial data for the past 12 months unless something triggers further scrutiny. If crypto transactions happened before that, or are deliberately excluded, they may never come to light.

Crypto wallets don’t come with monthly statements or sit on a shelf in the home office. They may be stored on phones, encrypted USB sticks or hidden behind ‘seed phrases’ - a string of 12 or more random words used to access a wallet. If someone claims they’ve lost access, proving otherwise is tricky.

Suspicion often arises when something just doesn’t look right. One party may notice bank transfers to unknown accounts, or sudden changes in spending patterns. In some cases, forensic accountants can be brought in to investigate, using blockchain tracing tools, though this comes at a cost and may only be worthwhile for higher-value disputes.

Even when an exchange account is known, assessing its value isn’t always straightforward. Crypto prices can swing wildly, creating further issues around how to fairly divide assets. Despite the public’s growing embrace of crypto, the law hasn’t yet caught up with the complexities when couples head for divorce. There’s little formal guidance or case law, and recovery can be nearly impossible if coins are held in uncooperative overseas exchanges.

“If you think crypto could possibly be involved, then say so early in the process,” advises Philip. “That way there’s an opportunity to make a search. While courts can overturn financial settlements where fraud or non-disclosure has taken place, doing so is difficult, expensive, and time-consuming. It’s far better to ensure full and frank disclosure before the divorce is finalised.”

Even when suspicions of hidden cryptocurrency are well- founded, it’s important to proceed with care. Covert attempts to
access a spouse’s digital accounts or gather evidence without consent could breach privacy laws and backfire in court. Any evidence gathered improperly may be ruled inadmissible - and could even be seen as harassment.

Added Philip: “If you suspect financial concealment, it’s best to raise it through formal disclosure processes and seek legal advice on appropriate next steps. Formally letting a partner know that it could backfire if they deliberately hide crypto assets, may be enough.

“As relationships - and finances - become more digitally complex, crypto is fast becoming part of the mainstream in family law. Ensuring it’s properly considered could mean the difference between a clean, fair break and a costly oversight.”

What can you do?
• Raise concerns early: Even a vague suspicion is worth flagging to your solicitor
• Keep records: Joint bank statements or other documents may contain clues to transfers to wallets or exchange accounts
• Ask questions: If a partner had an interest in crypto previously, assume it could still be part of the picture

Web site content note: This is not legal advice; it is intended to provide information of general interest about current legal issues.