Hidden Dangers: Cryptocurrency and Divorce

Hidden Dangers: Cryptocurrency and Divorce

Hidden Dangers: Cryptocurrency and Divorce

Divorce is an intricate process, made even more complex by the advent of cryptocurrency and non-fungible tokens (NFTs). A recent case in Oklahoma brings to light the challenges posed by the inherently undiscoverable nature of digital assets within a pro se divorce proceeding. The husband, a software developer, successfully exited the marriage with substantial undivided cryptocurrency holdings, including a notable collection of CryptoPunks, leading to husband receiving an inequitable and unjust division of marital assets. This blog post delves into the unique issues presented in this case, emphasizing the importance of full asset disclosure and exploring strategies to protect oneself in the face of hidden digital assets,  such as cryptocurrency, during divorce.

Roberts Case Summary

The parties, divorced through a consent decree in April 2021, neither party hired legal representation during the proceedings. The divorce decree granted the husband a larger portion of the marital estate based on representations about the value and nature of his digital assets, such as cryptocurrency and NFTs. Post-divorce, the wife discovered a deposit into the husband’s account, revealing undisclosed transactions during the divorce. The deposit was almost three times the amount of the entire marital estate as disclosed by the husband during the divorce proceedings. The wife sought to vacate the decree, presenting evidence of the husband’s intentional misrepresentations and concealment of significant digital assets.

The trial court, however, ruled against the wife, stating that the inaccurate representation of asset value did not meet the clear and convincing evidence threshold for fraud. The wife has appealed to the Oklahoma Supreme Court, challenging the denial of her motion to vacate.

Issues of First Impression

The Roberts case raises novel issues regarding the inherently undiscoverable nature of cryptocurrency and digital assets within a pro se divorce proceeding. The lack of legal representation allowed the husband to manipulate the disclosure process, resulting in an unequal division of assets.

Summary of the Roberts case from the trial record:

  1. The husband, a software developer, began acquiring NFTs, specifically CryptoPunks, in 2017.
  2. The parties separated in March 2020 but maintained contact, complicating the divorce process.
  3. A marital balance sheet prepared by the husband included a CryptoPunk estimate of $207,000.
  4. The parties entered into and believed they had an enforceable agreement in February, leading to the entry of the divorce decree in April 2021.
  5. Post-decree, the wife discovered a significant deposit, prompting an investigation into undisclosed transactions.
  6. The husband liquidated over $1 million in cryptocurrency, not disclosed during divorce negotiations.
  7. The husband actively moved assets during the negotiation period, misrepresenting the value of his holdings to the wife.

The Hidden World of Cryptocurrency

Cryptocurrency, with its decentralized and anonymous nature, poses unique challenges in divorce cases. Unlike traditional assets, such as real estate or bank accounts, cryptocurrency can be easily hidden or undervalued. Digital assets are held within a digital wallet such as Coinbase and MetaMask. Most wallets are anonymous. In fact, if a party holding digital assets does not disclose and claim their wallet, there is no way to establish their ownership of a digital asset. The Roberts case in Oklahoma exemplifies how the lack of transparency in digital asset disclosure can lead to an unfair distribution of assets, undermining the equitable principles of divorce proceedings.

The Need for Full Disclosure

One of the fundamental principles of divorce proceedings is the requirement for full disclosure of assets. However, the intangible and often elusive nature of cryptocurrency makes it easier for one spouse to conceal holdings. The wife in the Oklahoma case sought to vacate the divorce decree to ensure a fair division of assets, but her request was denied. This highlights the urgency for legal systems to adapt and address the challenges posed by digital assets.

Protecting Yourself in the Digital Age

As cryptocurrency becomes increasingly prevalent, individuals must take proactive steps to protect their interests during divorce proceedings. Here are some key strategies:

Demand Verified Asset Disclosure

Insist on complete transparency regarding all assets, including cryptocurrency and NFT holdings. Do not settle for any disclosure that is not verified by the disclosing party. Work with legal professionals who are well-versed in digital asset valuation and disclosure and understand the discovery tools at their disposal to create a verified record of discovery. It’s important to obtain the disclosure of wallet addresses, identify the exchange the wallet is hosted on, and identify the keys to the wallet itself. Never settle a divorce case without first having the opposing party verify the ownership or lack thereof to digital assets.

Utilize Forensic Experts

If possible, employ forensic accountants and blockchain experts to trace and evaluate cryptocurrency holdings. Ensure that all digital assets are accurately valued to prevent manipulation. In many states though, including in the Roberts case, the party holding the cryptocurrency may be the expert in the area creating an obstacle for the non-holding spouse. This places a heightened need for full and verified disclosure.

Include Digital Assets in Prenuptial Agreements

Anticipate the potential for cryptocurrency ownership in prenuptial agreements. Clearly outline the treatment of digital assets in the event of a divorce. It is wise to also include a requirement that any digital assets held by a spouse are fully disclosed to the other spouse throughout the marriage.

Stay Informed About Cryptocurrency Regulations

Divorce attorneys should stay up to speed of evolving cryptocurrency regulations that may impact divorce proceedings. Advocate for legal reforms that address the unique challenges posed by digital assets, including a heightened expectation of disclosure when the assets are not discoverable by traditional means.


The intersection of cryptocurrency and divorce introduces a host of challenges that demand a nuanced and adaptive legal approach. The Oklahoma case serves as a good example of the need for comprehensive disclosure and equitable distribution in the digital age. By demanding transparency and disclosure and seeking expert guidance individuals can navigate the complexities of cryptocurrency in divorce proceedings and ensure a fair resolution of assets.

The Smith Firm understands the issues facing any divorcing spouse, and has litigated this very issue and understands the issues surrounding digital assets, including NFT’s and cryptocurrency. If you are facing divorce in which cryptocurrency and digital assets are at issue and would like to discuss your options relating to this and other issues, contact us today to schedule a free phone consultation.