In Singapore’s tech-forward landscape, cryptocurrency is evolving from a digital fascination to an emerging significant marital asset in divorce proceedings.
This shift reflects the growing enthusiasm for investment among millennials, leading to digital currencies becoming a common element in separations.
The Singapore High Court, in UTL v UTM [2019] SGHCF 10, held that one party’s Bitcoin investment was a matrimonial asset liable for division.
Key questions arise:
- How are digital currencies like Bitcoin and Binance distributed between parties?
- How is their value assessed for equitable division?
Addressing these inquiries demands meticulous legal guidance.
This article aims to clarify how to handle these digital assets during divorce in Singapore, offering essential insights if you are facing the dissolution of marriage.
Complications in Divorce
Dealing with cryptocurrency when dividing assets between ex-spouses involves unique challenges due to its digital nature, security features, and decentralised system.
Without a central authority, tracking and dividing these assets can be complex, allowing for potential concealment by a spouse. A spouse could easily hide or obscure these assets, complicating the discovery and division process.
Valuating Cryptocurrency
Due to cryptocurrencies’ highly volatile nature, their valuation can be quite unpredictable. For example, the price of a cryptocurrency can experience significant shifts in a very short period.
Therefore, determining its value during divorce proceedings is crucial. The valuation date is usually the date closest to the ancillary matters hearing.
In light of the market’s volatility, the value of cryptocurrency could differ significantly by the time the divorce is finalised. It remains to be seen how the Court will deal with this issue involving cryptocurrency valuation.
Legalities and Challenges
Just like any financial asset, it’s a legal requirement to reveal your cryptocurrency holdings in the event of a divorce. Nonetheless, if a spouse intentionally conceals assets by using cryptocurrency, it becomes significantly harder to identify and establish ownership compared to traditional assets like bank accounts, shares, or bonds.
For instance, a spouse might be aware or suspect the existence of hidden cryptocurrency investments but could be clueless about how to access them.
The decentralised nature of cryptocurrency further complicates matters, as there’s no central authority to which one can issue a subpoena for the records. In that case, the aggrieved spouse should hire a specialist forensic accountant to trace these investments.
How will cryptocurrency be distributed on divorce?
In recent cases, the Court has handled instances where one spouse solely owned cryptocurrency. In such scenarios, the Court has accepted the valuation provided by one spouse to calculate the total value of matrimonial assets.
Following this, the Court has determined the ratio for dividing these assets. Subsequently, the Court has divided the assets to ensure each spouse receives their respective share of the total matrimonial asset pool, while allowing the spouse owning the cryptocurrency to retain it in their sole name. It remains to be seen how the Court will distribute cryptocurrency that spouses jointly own.
Guarding Your Interests
One of the most contentious aspects of a divorce is settling the financial details. It can be even more difficult when dealing with crypto holdings, especially when they are used to conceal assets.
At GJC Law, we specialize in navigating the complexities of dividing matrimonial assets during divorce proceedings. Our experienced team is dedicated to protecting our clients’ rights and interests, ensuring a fair resolution in this sensitive area of family law.
If you’re navigating through a divorce, our team is here to ensure you receive your equitable portion of financial assets. Reach out to us now to arrange a consultation with one of our experienced divorce lawyers.
We’re here for you
Should you have any questions or would like more information on the Division of Matrimonial Assets, please contact Gloria James-Civetta & Co to speak to one of our lawyers.
