Courts in England and Wales have experienced their first instances where cryptocurrency have been listed as an asset, raising fears that some partners could use the digital money in future to hide assets.
Lawyers have revealed that a number of cases have recently come before the Courts where cryptocurrencies were listed as assets, but it is not yet clear how the Courts will be able to deal with these new forms of capital.
Under current legislation, the Courts have powers to investigate hidden and undisclosed assets and freeze them, where necessary.
However, unlike a traditional bank account, the Courts have no powers at all to freeze cryptocurrencies if they suspect a person is trying to hide assets, as they are not regulated in the same way as banks and other financial institutions.
Also, unlike tangible assets such as high-value cars or artworks, cryptocurrencies are designed to be difficult to track and access.
In order to combat this issue it is thought that the Courts could appoint a forensic accountant or digital expert to scrutinise a person’s accounts when it is suspected that they are trying to hide capital in cryptocurrency.
It has been revealed in recent hearings that the Courts also don’t have any guidance on how to deal cryptocurrency as a result of its relatively new emergence.
The value of cryptocurrencies is very volatile and what may have once been worth £3 million could quickly be worth £2 million by the end of a case affecting eventual settlements.
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