Cryptocurrency and Family Law
Even though bitcoin has been around for at least 10 years it is a relatively new concept. There is very little precedent in family law around cryptocurrency and its impact on family law related matters such as valuation, taxation consequences and disclosure issues.
So what is crypto currency?
Cryptocurrency is a kind of digital currency, virtual currency or alternative currency. Cryptocurrency allows users to transfer currency without the use of a central bank and is generally free from bank charges and other charges.
Cryptocurrency users can take advantage of being able to purchase at anytime and anywhere in the world without delay or restriction, there are no bank or transfer fees and it provides the user with anonymity.
Cryptocurrency is held in a digital wallet. Only the owner has access via a unique digital code. So in essence it is the same as a wallet containing cash or a pile of cash hidden under the bed with only the owner knowing where it is and how to access it.
Cryptocurrency in Family Law
Leaving aside the issues of valuation and taxation issues, the biggest difficulty facing family lawyers and their clients around cryptocurrency will be the added level of complication that cryptocurrency brings to disclosure obligations.
Parties in family law proceedings have an obligation of full and frank disclosure of all matters relevant to their proceedings. Regulation 24.03 of the Federal Circuit Court Rules 2001 and Rule 13.04 of the Family Law Rules 2004 set out in detail the disclosure requirements in each Court and there is no doubt that cryptocurrency falls within the list of things that should be disclosed.
So what happens where one party uses cryptocurrency to attempt to hide assets?
It may be the case that family law proceedings will see a rise in the use of Anton Pillar Orders with Courts ordering the seizure and search of computers and electronic devices in an attempt to locate the virtual assets.
Even if the virtual assets cannot be found, evidence of the real assets being siphoned off (for example large amounts of cash disappearing from bank accounts) can be used by the Court to make adverse inferences against the offending party and orders awarding the innocent party a greater share of the identifiable assets.Cryptocurrency, Disclosure, Full and Frank Disclosure, property proceedings, property settlement
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