The law is moving fast. Is your divorce strategy keeping up?
In March 2021, Christie’s sold a digital collage for $69.3 million. The buyer received no canvas, no certificate and no physical object of any kind, only a non-fungible token (“NFT”) confirming ownership. For most observers, the headline was the price. For family lawyers, it raised a different issue; a highly valuable asset, held in a private digital wallet outside any bank or regulated institution lacking a paper trail, is precisely the kind of asset that disappears on divorce.
The legal position and court powers
The Property (Digital Assets etc) Act 2025 (“2025 Act”), which received Royal Assent on 2 December 2025, resolved long-standing uncertainty about where cryptocurrency and NFTs sat within English property law. The 2025 Act confirmed that an asset is not prevented from being personal property simply because it falls outside of the traditional categories of things in possession or things in action. This gives the courts a clear statutory foundation for treating digital assets as property that can be dealt with on divorce.
The court’s powers under section 24 of the Matrimonial Causes Act 1973 to order the transfer or settlement of property extend equally to digital assets. A cryptocurrency holding or an NFT collection can be made subject to a transfer order in the same way as a house or share portfolio.
The disclosure obligation
Even before the 2025 Act, NFTs and cryptocurrency were treated as assets under English law and were therefore required to be disclosed on a party’s Form E in divorce proceedings – a position the 2025 Act has since put beyond doubt. The duty of full and frank disclosure requires each party to give the court correct, complete and up-to-date information about their financial position. The House of Lords confirmed in Livesey v Jenkins [1985] AC 424 that this duty applies equally to consent orders, and that an order obtained without full disclosure can be set aside. Where a party fails to give proper disclosure, the court can draw adverse inferences justified by the evidence.
Digital assets lend themselves to concealment in a way that conventional assets do not. A cryptocurrency wallet, the digital address where crypto assets are held and transferred, requires neither an institution or identity to open. Transfers take seconds and leave no bank statement, while an NFT holding can similarly be moved before proceedings have been issued.
The cost of pursuing the allegation
In DH v RH [2024] EWFC 79, the wife alleged her husband had hidden cryptocurrency worth between £170 million and £210 million, incurring almost £1.9 million in costs pursuing her case. Mr Justice MacDonald rejected her case in full, finding true matrimonial assets of only approximately £12 million. Criticising her reckless spending on an unmeritorious case, he added £800,000 to her asset schedule to reflect that expenditure before dividing the remaining assets almost equally (52% wife, 48% husband). Combined costs reached £2.9 million, approximately 23% of total assets, and at a further hearing the wife was ordered to pay the husband £255,654.50 in total (£200,000 towards his costs, £25,000 for a disclosure exercise and £30,654.50 for a without-notice application), reflecting her egregious litigation conduct. Unfortunately in pursuit of her allegation, the wife had both failed and reduced her share of the matrimonial pot.
Why the blockchain changes the calculation
What makes concealing digital assets particularly ill-advised is the technology itself. On the major, established public blockchains most often encountered in financial remedy proceedings, such as Bitcoin and Ethereum, the ledger is, in practice, a permanent and publicly visible record of every transaction. Altering a past entry would mean rewriting every subsequent block and overpowering the rest of the network simultaneously, which is not realistic for a network of that size. That said, this is a matter of practical security rather than an absolute guarantee, and the same assurance does not hold with equal force for every blockchain.
Smaller or less well-secured networks have, on occasion, had their history rewritten by an attacker who gained control of most of the network’s processing power. Private or permissioned ledgers can be more vulnerable to alteration by whoever controls them. The assets in issue in financial remedy proceedings are, however, overwhelmingly held on major public chains, where the transaction record can be treated as durable and traceable in practice. Blockchain forensic analysis, linking wallet addresses to individuals and tracing asset movements, has become standard in complex financial remedy cases. A pattern of transfers before separation, such as assets moved to wallets in different names, or a sudden drop in declared holdings, leaves a durable record.
Valuation and tax
Where digital assets are properly declared, valuation and tax require early attention. Section 25 of the Matrimonial Causes Act 1973 requires the court to have regard to all the circumstances of the case, and that obligation directly engages the volatility of digital assets. Cryptocurrency prices can move substantially within days, sometimes by 10% or more, so a holding’s value can look very different depending on when it is measured. English law has not yet settled a single fixed date to be used to value crypto assets, such as the date of separation or the final hearing date, leaving room for argument between separating couples. NFTs present a greater challenge still, with no index and no reliable comparable.
HMRC treats both cryptocurrency and NFTs as “cryptoassets” for tax purposes, so disposing of them, whether by selling, exchanging, spending or gifting, can trigger a Capital Gains Tax charge on any increase in value since acquisition. From the 2024 to 2025 tax year, cryptoasset disposals must be separately identified on Self Assessment tax returns. As both valuation timing and tax consequences can shift so significantly, the order and structure of transfers within any settlement needs specialist tax and financial advice from the outset, not once terms are already agreed.
Looking ahead
The 2025 Act gives the courts the statutory foundation they previously lacked. In Standish v Standish [2025] UKSC 26, the Supreme Court further confirmed that the sharing principle, i.e. the starting point that matrimonial assets should be divided equally, applies only to matrimonial property. Non-matrimonial property (typically pre-marital assets, inheritances and gifts) falls outside the sharing principle unless the parties have, over time, treated the asset as shared, a process the courts have termed “matrimonialisation”.
This landmark ruling provides vital clarity on divorce and financial settlements, confirming that the family courts are prepared to engage with sophisticated financial structures. Digital asset portfolios will receive the same scrutiny as any other asset class, and the forensic tools available to trace them are becoming more powerful every year.
For anyone on either side of a divorce where digital assets may be in play, the earlier specialist advice is sought, the more options remain available.