Crypto Spats: Divorce Lawyers Battle Hidden Digital Assets

- Family lawyers increasingly dealing with cryptocurrency in divorce settlements. - Handling crypto assets presents unique challenges due to their pseudonymous nature and non-KYC platforms. On June 18, 2025, The Block reported that as crypto increasingly infiltrates everyday finances, family lawyers now face unprecedented hurdles in divorce cases, a trend creating significant challenges for legal professionals, especially in uncovering, valuing, and dividing cryptocurrencies. The pseudonymous nature of many cryptocurrencies and the frequent use of non-KYC (Know Your Customer) platforms add complexity to the asset discovery and division process; consequently, managing crypto assets in divorce cases requires transparency and expert involvement. In response, modern prenuptial and postnuptial agreements increasingly include clauses that define how to treat cryptocurrency, specifying whether it is separate or marital property and detailing valuation and division methods for divorce scenarios. Christopher R. Castellano, a principal at Joseph, Greenwald & Laake, mentioned that certain indicators might suggest a spouse is attempting to hide funds, such as unexplained cash withdrawals, a sudden interest in technology, or mentions of crypto applications, exchanges, and wallets without further details. Castellano noted that while significant efforts to conceal wealth via cryptocurrency remain rare, spouses more commonly use marital money covertly for crypto or hide crypto gains. Simultaneously identifying and valuing various assets presents one of the most challenging aspects in these cases, and the inherent volatility of cryptocurrency values makes this task particularly difficult, especially during a strong crypto market. Despite this volatility, courts typically consider the value the parties assign to a specific asset or its value on the trial date. Although pseudonymity and non-KYC platforms pose challenges, courts can issue discovery orders mandating full financial disclosure. However, identifying the asset often requires expert analysis and onchain tracing, and for significant cryptocurrency transactions, experts recommend engaging a forensic accountant with specialized onchain expertise. The legal framework for handling digital assets in divorce continues to evolve; however, courts generally treat cryptocurrency similarly to other marital assets, which are subject to equitable division based on factors such as contribution, dissipation of assets, and economic circumstances. As legal professionals and courts increasingly understand cryptocurrency and DeFi transactions, they commonly rely on expert testimony, a practice mirroring how they handle other new and complex legal areas. Castellano emphasized that proper disclosure of crypto assets is crucial to avoid severe legal consequences and advised involving tech-savvy professionals early in the divorce process. According to CoinMarketCap on June 18, as of 12:00 UTC, Ethereum (ETH) was trading at $2,850, with a 1.8% increase in its 24-hour trading volume.