Clients are often alive to the potential of assets being hidden by their spouse. From undisclosed properties, sophisticated tax schemes and offshore company holding structures, the methods by which one could attempt to conceal assets are diverse, creative and increasingly complex.

Over the past two decades, the English courts’ approach to financial remedy and the division of assets upon divorce has evolved. This is following the case of White, in which Lord Nicholls stated that there should be no bias in favour of the money-earner and against the home-maker.

This has led some parties within divorce proceedings to go to increasing lengths to frustrate the disclosure process upon which any financial judgement will be predicated, in a bid to put assets beyond the jurisdiction of the court. Accordingly, the court’s approach has been progressively more robust, to dissuade litigants from failing to positively engage in the disclosure process. These include setting aside any agreements made as a result of fraudulent non-disclosure and drawing adverse inferences from non-disclosure also.

Concurrently, there has been a legislative push towards transparency for offshore assets, which will undoubtedly affect both their allure and efficacy for litigants. The Sanctions and Anti-Money Laundering Act 2018 provides for British Overseas Territories to establish publicly accessible registers of the beneficial ownership of companies in their jurisdiction. British Overseas Territories, for reference, include the sunny retreats of the British Virgin Islands, Bermuda and the Cayman Islands, previously verdant arcadias for asset concealment.

Such measures have forced litigants with questionable motives to explore other options to conceal their assets. Enter: cryptoassets. Cryptoassets are immutable, digital assets which are stored in wallets on various servers, known as exchanges. These assets take the forms of currencies like Bitcoin, Ethereum and Tether as well as NFTs, otherwise known as non-fungible tokens which are assets, typically used to sell digital art at present.

These assets have proven attractive because they sit separately from other standard assets like stocks, shares and pensions and therefore, there is a level of concealment which is provided. Moreover, assets can be transferred from wallet to wallet and, ultimately, cashed in. Whilst the transactions originating to and from the wallet are traceable and stored on the blockchain, the identity of the wallet holder is not openly available and wallets are identified only by a series of numbers, making it much easier for wallet holders to remain anonymous.

These assets can, therefore, prove more difficult than traditional assets when it comes to asset tracing and enforcement.

Nevertheless litigants should beware as recent judgments have brought into sharp relief that the judiciary are increasingly aware of these assets and will remedy inequity as they would with any other asset class. This includes allowing wallets which hold these assets to be frozen, to avoid risk of dissipation. Moreover, an increasing number of specialist forensic investigators can trace these assets using the blockchain, a digital ledger which stores all transaction data for these cryptoassets, denying litigants the ability to totally conceal these assets.

There will always be those that attempt non-disclosure of assets upon divorce. However, with a range of remedies available, specialist legal and financial experts and a judiciary energised to the threat, cryptoassets are not a cure all for those that seek to conceal assets upon divorce.