Generation Z have embraced the development of cryptocurrency with enthusiasm. As their generation begin to navigate the divorce process, their digital assets are introducing new complexities into the legal process. 

Younger married couples have larger digital footprints than the courts have seen before, encompassing the ownership of cryptocurrency. Whilst there are many arguments in favour of the Digital Age, cryptocurrencies are difficult to value, trace, and divide upon divorce. Crypto holdings are often decentralised and pseudonymous, posing challenges for lawyers trying to identify, value and distribute assets.

A party to a relationship may think their crypto assets are not at risk, as they are owned in their sole name, or purchased before the relationship. This overlooks the concept of “matrimonialisation”, the process by which assets that belonged to one spouse before marriage can be considered for sharing between a couple in some circumstances. 

Bitcoin is the most recognised crypto currency, with reports suggesting around 3.9 million people in the UK own it. Crypto assets can be a significant asset for some couples. The value of cryptocurrency can experience significant fluctuations; the absence of regulation means markets change incredibly fast. In May 2021, the market plummeted more than £1tn in a matter of weeks. It is harder to resolve cases where the parties’ net worth is subject to rapid and significant change.

These digital entanglements reflect a broader shift in how relationships are formed and dissolved in the modern age. For lawyers, adapting to these changes means developing new strategies for asset discovery. 

If you have any questions or concerns about the issues raised, please reach out to a member of the family team