14 Jul How Does the Family Court Deal with Cryptocurrency in Property Settlements?
How does the Federal Circuit and Family Court of Australia deal with cryptocurrency in property settlements?
As cryptocurrency continues to gain popularity as both an investment vehicle and a medium of exchange, it has increasingly become a point of contention in family law property settlements. Whether it’s Bitcoin, Ethereum, or any other digital asset, the Federal Circuit and Family Court of Australia (FCFCOA) treats cryptocurrency as property under the Family Law Act 1975 (Cth). However, its unique nature presents complex legal, evidentiary and valuation challenges.
This blog explores how the FCFCOA addresses cryptocurrency during property division proceedings and what separating parties need to know when these digital assets are involved.
Legal framework: cryptocurrency as property
Cryptocurrency is treated as a form of property in Australia for the purposes of family law proceedings. This means it forms part of the asset pool and must be disclosed, valued, and considered in the overall property settlement.
There is no specific mention of cryptocurrency in the Family Law Act 1975, but the principles for property division apply to all types of property, including traditional bank accounts, shares, superannuation, real estate — and digital assets.
Disclosure obligations and cryptocurrency
One of the fundamental duties in family law is full and frank disclosure of all assets and liabilities (Rule 6.06 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021).
This duty extends to all cryptocurrency holdings — regardless of when they were acquired, how much they are worth, or whether they are currently being traded.
However, cryptocurrency can present significant challenges in compliance:
- Digital assets are highly mobile, anonymous, and often unregulated.
- Wallets can be stored on USB devices, phones, or cloud-based services.
- Transfers can be made without leaving a clear paper trail.
Practical Tip: The Court can draw adverse inferences where there is suspicion that a party is hiding assets. If a party fails to disclose crypto holdings, they risk credibility damage, cost orders, or even a skewed property division.
Tracing and locating cryptocurrency assets
When a party suspects the other is concealing cryptocurrency, they may need to undertake forensic investigations, including:
- Reviewing bank statements and credit card transactions for evidence of crypto purchases (e.g. Coinbase, Binance, Kraken).
- Examining email records and browser histories.
- Seeking discovery or issuing subpoenas to cryptocurrency exchanges.
Courts have shown increasing willingness to engage with crypto assets, but litigants must provide evidence to support their claims.
Key Case Example: Powell v Christensen [2021] FedCFamC1F 82 — the Court accepted evidence that a party had engaged in crypto trading and factored the holdings into the property pool, despite initial non-disclosure.
Valuation challenges
Cryptocurrency is inherently volatile, which makes valuation at a fixed point in time difficult. Courts generally determine the value of assets at the date of trial, not at separation.
This can create problems, particularly when:
- One party holds the crypto and can buy/sell to their advantage;
- The value of the crypto fluctuates wildly between separation and trial;
- Crypto assets are stored in obscure or illiquid wallets.
Valuation requires:
- Current wallet balances
- Access to transaction history
- Expert input in some cases
If the Court is unable to determine a precise value, it may adopt a best estimate approach or discount the value to account for uncertainty.
Division and treatment of cryptocurrency
Once the crypto has been identified and valued, the Court must decide how to treat it in the overall division:
- As a discrete asset: It can be retained by the holder and accounted for in the property division (e.g. Party A keeps the crypto, Party B gets cash or another asset of equivalent value).
- As a financial resource: If the crypto is illiquid, uncertain, or subject to loss, it may be treated more like a potential future benefit.
- Sell and divide: In some cases, the Court may order the sale or transfer of crypto, but this is rare due to complexity and market risks.
The FCFCOA is not inclined to force one party to receive crypto as part of the settlement unless they agree to it — especially given the risks and volatility.
Cryptocurrency and contributions
If one party invested early in cryptocurrency (e.g. Bitcoin in 2012) and it appreciated significantly, this may be considered a financial contribution under Step 2 of the property settlement process.
The timing of acquisition matters:
- Crypto acquired before the relationship may be treated as an initial contribution.
- Crypto acquired during the relationship may be a joint contribution, depending on usage.
- Crypto acquired after separation may be argued to be a post-separation contribution by the acquiring party.
Each case will turn on its facts.
Concealment and non-compliance
Where there is suspicion of non-disclosure or fraud:
- The Court may reverse the burden of proof to the party accused of concealment.
- The Court may make adjusted orders to penalise nondisclosure.
- The Court may order costs against the dishonest party.
The FCFCOA take disclosure duties seriously — especially when it comes to traceable, high-value digital assets.
Key takeaways
- Cryptocurrency is treated as property under the Family Law Act and must be disclosed like any other asset.
- Valuing and dividing crypto involves unique challenges due to volatility, anonymity, and lack of regulation.
- Non-disclosure or concealment of crypto assets can result in significant legal consequences.
- Forensic tracing and expert valuation may be necessary, especially in complex matters.
- The Court will focus on a just and equitable outcome — crypto assets are one piece of a larger property settlement puzzle.
Final thoughts
As cryptocurrency becomes more mainstream, it’s crucial for family law litigants and lawyers to stay ahead of the curve. Whether you hold digital assets or suspect your former partner does, you must be prepared to address these issues with the necessary legal and technical expertise.
If you’re going through a separation and cryptocurrency is part of your financial picture, seek early legal advice to ensure your rights are protected and obligations met. We invite you to call Di Rosa Lawyers on 08 8276 7955 or make an online enquiry by clicking this link: Contact – Di Rosa Lawyers
This blog is published by Di Rosa Lawyers for informational purposes only and is not considered legal advice on any subject matter. By reading and re-publishing the blog, you acknowledge that there is no solicitor-client relationship between you and Di Rosa Lawyers. This blog should not be used as a substitute for legal advice from a legal practitioner who specialises in the area and you are urged to consult us or seek your own independent legal advice on any specific issue or matter.
