Cryptocurrency & Family Law
Digital currencies are no longer a niche concern. As more Australians hold cryptocurrency as part of their financial lives, these assets are appearing with increasing regularity in family law property settlements — and the courts are paying close attention.
Australian courts have confirmed that digital assets such as Bitcoin and Ethereum are property under family law. That means they need to be disclosed, valued, and divided just like a house, a car, or a share portfolio. But cryptocurrency comes with its own set of complexities that can make even straightforward settlements significantly more involved.
What Is Cryptocurrency?
Cryptocurrency is a digital form of currency that uses cryptography for security. It operates independently of any government or central bank, and transactions are recorded on a blockchain — a decentralised digital ledger maintained across a global network of computers. That same technology that makes cryptocurrency transparent also makes it remarkably difficult to trace and value in a legal context.
Digital Assets in Australian Family Law
The Family Law Act 1975 requires parties to a property settlement to make full and frank disclosure of everything they own — and digital assets are no exception. This covers:
Cryptocurrencies including Bitcoin (BTC), Ethereum (ETH), and other altcoins
Non-Fungible Tokens (NFTs), which can carry substantial value
Digital wallet balances holding a range of crypto assets
Online accounts, including interests in digital businesses, platforms, or high-value gaming assets
Courts treat these assets the same way they treat any other property. They form part of the overall pool to be assessed and divided between the parties.
The Challenge of Valuation
Perhaps the most immediately obvious difficulty with cryptocurrency is its volatility. Values can shift by 20% or more in a single day, or by as much as 80% over a month. This creates real uncertainty when trying to pin down an accurate figure for settlement negotiations or court proceedings.
Courts have some flexibility in how they approach this — they may look at the value at the point of separation, at the date of hearing, or at the time of sale, depending on what is fair in the circumstances. In all cases, expert valuation is strongly advisable.
Uncovering Hidden Cryptocurrency
Cryptocurrency's decentralised and largely private nature makes it easier to hide than most other assets. For this reason, identifying undisclosed digital holdings often requires careful investigation, including:
Reviewing bank and credit card records for transfers to crypto exchanges
Examining tax returns for cryptocurrency income or capital gains disclosures
Issuing subpoenas directly to exchanges
Analysing email and digital communications for evidence of crypto activity
Courts are increasingly familiar with these strategies, and parties who attempt to conceal digital assets do so at considerable legal risk.
Case in Point: Muir & Rodelo (No 2) [2023] FedCFamC1F 845
This case illustrates just how seriously the courts treat cryptocurrency concealment in family law proceedings. The husband had transferred and attempted to hide a significant amount of cryptocurrency during and after the relationship. The court found he had deliberately engaged in subterfuge and adjusted the property division accordingly — awarding the wife 55% of the asset pool.
Notably, the court also addressed the question of control. Although the wife physically held the hardware wallet, she had no practical access to or management of the funds, which had been entirely controlled by the husband. This distinction was central to how the court determined beneficial ownership.
Tax Considerations
In Australia, cryptocurrency is treated as property rather than currency, which means it is subject to Capital Gains Tax (CGT). Key points to understand:
Each time cryptocurrency is sold, traded, or otherwise disposed of, a CGT event occurs
Any resulting gain or loss must be calculated and reported
CGT obligations can arise from the settlement itself, and may continue well after the matter is finalised if assets are held and later sold
Legal advice that accounts for these tax implications from the outset is essential — overlooking them can significantly affect the real value of any settlement outcome.
What This Means for You
Whether you are concerned about non-disclosure, struggling with how to value volatile assets, or simply want to understand what your entitlements look like when cryptocurrency is involved, the key points are these:
All digital assets must be disclosed — there are no exceptions under family law. Concealment carries serious consequences, and even well-hidden crypto can often be traced. Valuation requires specialist input. And the tax consequences of any division need to be worked through carefully before any agreement is reached.
If cryptocurrency is a factor in your property settlement, getting the right legal advice early makes all the difference.
Written by Giorgia Wilson, Family Law Solicitor