Cryptocurrency & Divorce
Jan 14, 2026 | Written by: | Share
There is currently a lag in the law pertaining to cryptocurrencies1, particularly with regard to divorce. Many families, and particularly millennials, often hold various forms of cryptocurrency, and the difficulties in tracing same are only just coming to the forefront. It is important that you discuss the possibility of the existence of these types of assets with your attorney when going through a divorce.
In divorce, there is a period of discovery, whereby both sides are permitted to seek written information by way of interrogatories and requests for documentation (often referred to a Notice to Produce). In almost every case, even those that are amicable or uncontested, a financial form called a Case Information Statement (CIS) is prepared by each side and exchanged. This is a modicum of necessary information for attorneys to do some due diligence before they, their clients, or even the court (in some circumstances) can sign off on a settlement agreement and finalize the parties’ divorce. Are you disclosing and addressing crypto on these forms, which refer to a full financial disclosure?
It is believed there are three options in addressing cryptocurrency in a divorce: split the holding, sell the holding, or offset the holding with other assets.
In litigated cases where there are disagreements and perhaps difficulties in obtaining information, we sometimes issue subpoenas for financial records such as bank accounts, credit cards, retirement accounts, brokerage accounts, investments, and so on. All of these records are somewhat traceable and verifiable, but what about cryptocurrency? The decentralized structure of cryptocurrencies means they lack a central authority that maintains records, unlike traditional banks. While institutions like Robinhood and Black Rock hold records and are likely subject to subpoena, the rate at which new currencies and electronic formats are developed likely exceeds that to which we can respond.
Many cryptocurrencies are held in digital “wallets” identified only by cryptographic keys, which are often known only to the owner. This means it can be hard for anyone besides the holder to determine how much cryptocurrency exists and where it’s stored. A “wallet” is not necessarily tied to an address, a person, etc. Tracing cryptocurrency requires digital forensics because it is a digital asset. Then, assuming we can locate the asset, how do we address and establish who owns the wallet and the economic value associated with it?
Then we have to consider, how do we value the cryptocurrency? These assets can vary wildly and daily.
Unlike a traditional bank account, if access to a wallet is provided to another party, so is total control. This makes “sharing” the wallet an unlikely option, particularly in a high conflict divorce situation.
Then, assuming we can locate and equitably distribute cryptocurrency, what are the tax implications? The split of these assets can result in significant tax consequences, such as capital gains taxes.
All that being said, there is good news: there are experts available to uncover/trace potentially hidden crypto assets like wallets, NFT’s, etc.
I recently heard a staggering, but anecdotal, statistic at a 2025 New Jersey State Bar Conference that 40% of New Jersey high net worth individuals going through divorce reported having cryptocurrency they did not report or share with their spouse. It is possible that this information, if true, dictates that attorneys and clients need to be savvy in investigating the possibility of various forms of nontraditional assets. Further, discovery, forms, and cases should be adapted to ensure appropriate questions and investigations are undertaken to properly defend and advocate in matrimonial cases.
[1] By definition, cryptocurrency is a digital currency in which transactions are verified and records are maintained by a decentralized system. Unlike government-backed currency, there is no central authority (such as the U.S. Department of the Treasury for the U.S. dollar) that manages and maintains its value. Notable cryptocurrencies include Bitcoin, Ethereum, Doge, and Shiba. There are believed to be approximately 4,000 types of cryptocurrencies available. Bitcoin is by far the most popular and well known with more than 19 million Bitcoins in circulation as of May 2022. https://www.michbar.org/journal/Details/The-cryptocurrency-divorce?ArticleID=4568
Diana N. Fredericks, Esq., devotes her practice solely to family law matters. She is a Certified Matrimonial Law Attorney and was named to the NJ Super Lawyers Rising Stars list in the practice of family law by Thomson Reuters from 2015 through 2021, to the NJ Super Lawyers list in 2023, 2024, and 2025, and to the New Leaders of the Bar list by the New Jersey Law Journal in 2015. Contact Diana for a consultation at 908-735-5161 or via email.
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Any statements made herein are solely for informational purposes only and should not be relied upon or construed as legal advice.