Our Best Cryptocurrency Tips For Separation and Divorce helps you potentially find millions of property that needs to be fairly divided. Finding the missing pot of gold is not so cryptic after all, says top high net worth family lawyer Sophie Bartholomew.
As a family lawyer at MacLean Law, it is not unusual for us to see some creative accounting and hidden assets that a party does not want to be factored into the family property to be divided. But one interesting way of owning a financial interest, has impacts on divorce and property division; cryptocurrency. Making sure your lawyers know where to find the missing pot of gold is key. MacLean Law was Canada’s Family Law Firm of the Year for 2024 and we have been a winner of the top 5 firm in Canada as an Awardee of Excellence in this category. We have offices across BC and in Calgary.
Vancouver Best Cryptocurrency Tips For Separation and Divorce Tel: 604 602 9000
If you’re scratching your head at the mention of “Bitcoin” or “Ethereum,” you’re not alone. Yet, these digital assets are increasingly becoming ever more relevant in family law disputes in British Columbia and beyond. As detailed by the Court in M.M.D. v. J.A.H., 2019 ONSC 2208 (CanLII), “It is clearly a volatile, emerging, intangible source of wealth which the courts will have to grapple with more frequently in future” (para 140).
Read on to explore what cryptocurrency is, how it’s treated under BC’s Family Law Act, the unique challenges it poses in divorce, and how Canada’s approach compares to other common law jurisdictions.
Using Crpto to hide family property is a growing issue in separations.
What Is Cryptocurrency? Tel: 604 602 9000
Think of cryptocurrency as digital money. Except it doesn’t exist in your wallet or as a physical coin. Instead, it’s a form of currency that lives entirely online, secured by complex cryptography and recorded on a public ledger called the blockchain. Bitcoin was the first and is still the most famous, but there are thousands of others. People buy, sell, and trade cryptocurrencies on online platforms called exchanges, and they store them in digital “wallets.” Unlike your bank account, a crypto wallet doesn’t have your name on it; just a string of numbers and letters.
Cryptocurrency as Family Property in BC Tel: 604 602 9000
Under British Columbia’s Family Law Act, with the exception of excluded assets and other specific exceptions, almost all property and assets that you and your spouse own at the time of separation are considered “family property” which is to be divided equally between you following separation; and that includes cryptocurrency.
Family property covers all real and personal property, including money in accounts with financial institutions, shares in corporations, and yes, digital assets like cryptocurrency. If you or your spouse bought Bitcoin during your relationship, it’s family property, just like the house or the RRSPs.
Although the case law has not specifically detailed the form of asset cryptocurrency is that falls within the definition of the Family Law Act, the court has addressed crypto in the same manner as other financial assets:
- In Thiessen v Thiessen, 2025 BCSC 150 (CanLII) part of the family law dispute related to the division of cryptocurrency and foreign cash (Para 49). The Court determined that the cryptocurrency owned by the husband, be divided equally between the parties. The Court also noted the complexities arising from insufficient evidence of the precise values of the cryptocurrency and the volatility of cryptocurrency.
- In W. v N.L.M.W., 2021 BCSC 1273, the court included cryptocurrency in the division of family property without explicitly analyzing whether it fit the definition under the Family Law Act. The Respondent neglected to make disclosure regarding these crypto assets as the Respondent had only disclosed one account in his financial statement. The cryptocurrency assets were found to be family property and in this decision, Justice Veenstra held that the Respondent’s non-disclosure of his cryptocurrency assets was “particularly egregious”.
The Disclosure Dilemma: Finding Hidden Crypto
Here’s where things get tricky. Unlike a house or a car, cryptocurrency is intangible and, crucially, can be very hard to trace. Crypto wallets don’t have names attached, and transactions can be made anonymously. Some people see this as an opportunity to hide assets during divorce.
Courts are wise to these tactics. In several BC cases, including M.W. v N.L.M.W, 2021 BCSC 1273 (CanLII) (para 361) and Schiebel v Lumb, 2021 BCSC 2359 (CanLII), judges have dealt with spouses who refused to disclose their crypto holdings or claimed to have lost access. The courts can, and do, draw negative inferences, sometimes attributing a value to the hidden assets based on circumstantial evidence.
Winning Family Lawyers Best Cryptocurrency Tips For Separation and Divorce Tel: 604 602 9000
On the other side, the intangible digital nature of cryptocurrency means that there are risks associated with full disclosure of documents in family law proceedings, related to investments in cryptocurrency given concerns related to cyber theft or devaluation of the asset. This has resulted in the Court having ordered disclosure of cryptocurrency in a redacted form, in order to protect from the risk of prejudice to the disclosing party given the risks (M.M.D. v. J.A.H., 2019 ONSC 2208 (CanLII) para 141).
If you suspect your spouse is hiding cryptocurrency:
- Your lawyer can ask for disclosure of all digital wallets, exchange accounts, and transaction histories.
- Family Lawyers and Courts may also look at bank statements, credit card records, and even PayPal activity to track the flow of money into crypto.
- Forensic analysis or experts may be required to try and ‘follow the money’.
- Examinations for discovery of the spouse with the cryptocurrency interest may shed light on the holdings.
- If a spouse refuses to cooperate and the matter proceeds to court, the court can impute a value to the missing assets or even penalize the non-disclosing party.
How Is Cryptocurrency Divided in Divorce? Tel: 604 602 9000
Once cryptocurrency is identified as family property, it’s divided just like any other asset. In BC, the starting point is an equal division, but the court can make adjustments if there are compelling reasons. The volatility of cryptocurrency (its value can swing wildly from one day to the next) adds another layer of complexity. Sometimes, the court will order the crypto to be sold and the proceeds split; other times, one spouse may keep the crypto and pay the other their share in cash. The key is full disclosure and fair valuation to present to the Court to assist in their determination, or to assist in negotiating a settlement.
If you are the party with the cryptocurrency and you believe that the asset will likely increase in value following resolution of your family law matter, you may want to consider paying your other spouse for their share of the cryptocurrency interest as at the time of negotiation/ trial (by way of liquidation or offsetting against other assets). That sets a value, and then you would benefit from any increases (but also be solely impacted by any losses).
However, if you are the owner and believe that the cryptocurrency may go down in value, then you may wish to do a direct transfer of the spouse’s interest into their own crypto wallet. Then the spouse gets the underlying cryptocurrency and benefits from any gains but also is impacted by any losses. If they chose to dispose of the cryptocurrency, they may then be subject to capital gains taxes and tax advice would be necessary for both parties to ensure that the tax consequences of any transfer were considered.
How Does BC Compare to Other Jurisdictions? Tel: 604 602 9000
BC and Canada are not alone in grappling with the complexities of cryptocurrency in family law matters.
In the United States, the approach varies by state, but the trend is the same; cryptocurrency is treated as marital property. Courts in the UK and Australia have likewise recognized crypto as property to be disclosed and divided. The main difference lies in the tools available for discovery and the willingness of courts to draw adverse inferences when disclosure is lacking.
Final Thoughts Tel: 604 602 9000
Cryptocurrency is here to stay, and it’s changing the established traditional concepts of assets to be divided on divorce in family law. If you’re going through a separation, don’t overlook digital assets. Full and frank disclosure is not just the law; it’s the only way to ensure a fair division of property. And if you suspect your spouse is hiding crypto, rest assured: the courts have seen it before, and there are ways to bring those digital coins into the light.
BC Best Cryptocurrency Tips For Separation and Divorce
Contact our family lawyers who can help guide you through the family law process of property division, to include digital assets and cryptocurrency.
