Cryptocurrency and Divorce in Australia: What Happens to Bitcoin and Digital Assets?

What Counts as a Crypto Asset

"Crypto asset" covers more than Bitcoin and Ethereum. In a settlement you may be dealing with stablecoins, thinly traded tokens, non-fungible tokens, staked or locked holdings, vesting entitlements, decentralised finance lending and borrowing positions, liquidity pool interests, airdrops, forks and staking rewards. Each can differ in value, liquidity and in what the holder actually controls.

How an asset is held matters just as much as what it is. Holdings may sit with a custodial exchange, in a self-custody wallet on a phone or computer, or in cold storage on a hardware device or paper backup. They may also be held through a company, trust or self-managed superannuation fund. Those differences shape what records exist, who can move the asset, and how a transfer can practically be completed.

Is Cryptocurrency Property Under the Family Law Act?

Yes, in the ordinary case. "Property" is defined broadly in section 4(1) of the Family Law Act as the property to which the parties are, or either of them is, entitled, whether in possession or reversion. Crypto assets are ordinarily brought into account when the court considers whether to alter property interests under section 79 for married couples or section 90SM for eligible de facto relationships.

Powell & Christensen [2020] FamCA 944 is a first-instance decision in which the court dealt with disclosure and add-back arguments concerning a Bitcoin investment on the particular facts before it. It is not appellate authority on how crypto assets are characterised generally, and it should be read as an example of the orthodox approach rather than as a rule.

Disclosure: What the Law Requires

Each party owes a duty of full and frank disclosure of information relevant to financial or property matters, in a timely manner. Since 10 June 2025 that duty is stated in section 71B of the Family Law Act for marriages and in section 90RI for de facto relationships. The statutory duty applies from the start of a proceeding until it is finalised, and subsections 71B(5) and 90RI(5) extend it to the period while a party is preparing for a proceeding, which is where most negotiated settlements are in fact conducted.

The procedural obligations sit in Chapter 6, Part 6.1 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth). Rule 6.01 states the general duty, rule 6.02 requires each party to file an undertaking that they have read and understand the duty, and rule 6.06 sets out what must be disclosed in financial or property proceedings — including earnings, vested or contingent interests in property, interests held through a company or trust, and other financial resources. Crypto assets fall within that list whether they are held on an overseas exchange, in self-custody, through an entity, or at a value the holder considers trivial.

Disclosure of crypto is not limited to a current balance. It ordinarily extends to exchange accounts, wallet addresses, transaction histories, acquisition records and disposals, so that the other party can understand what was held and what happened to it. Our article on financial disclosure and suspected hidden assets deals with the process in more detail.

Consequences of Non-Disclosure

Different consequences follow from different conduct, and they should not be conflated.

• Orders compelling disclosure. The court can order production of specified categories of documents, answers to questions, and issue of subpoenas to exchanges, banks and accountants.
• Adverse inferences. Where a party fails to give a credible account of assets shown to have existed, the court may draw inferences against them about the existence or value of the missing asset.
• Costs. Under section 114UB, each party ordinarily bears their own costs, but the court may make any costs order it considers just and must have regard to matters including the parties' conduct in relation to their duty of disclosure under subsection 71B(1) or 90RI(1).
• Contempt. Contempt of court under section 112AP is a distinct remedy with its own requirements; it does not follow automatically from incomplete disclosure.
• Setting aside final orders. An order altering property interests may be set aside under section 79A, or section 90SN for de facto relationships, where there has been a miscarriage of justice by reason of matters including fraud, suppression of evidence or a failure to disclose relevant information, subject to the statutory thresholds and the court's discretion.
• Criminal exposure. Knowingly false sworn evidence in a federal judicial proceeding may amount to an offence such as giving false testimony under section 35 of the Crimes Act 1914 (Cth), where each element of that offence is established. That is a separate criminal question, not a family law outcome.

Can Crypto Be Hidden, and Can It Be Traced?

Crypto is neither as anonymous nor as transparent as it is often described. Many blockchains publish transaction records, but not all do, and a public record of a transaction is not proof that a particular person owns or controls the wallet at either end. Attribution is the hard part, and it becomes harder where privacy coins, mixing services, peer-to-peer trades, decentralised services or cross-chain transfers are involved.

Self-custody and cold storage do not necessarily sit outside the evidence. Assets usually have to be bought and eventually sold, and those steps commonly connect to an exchange account, a bank account or a tax return. But that is a tendency, not a rule: crypto can be acquired, transferred and held in ways that leave little conventional footprint, and a party should not assume that anything undisclosed will inevitably surface.

Where a party fails to account credibly for assets known to have existed, the court can draw an adverse inference, consistently with the approach taken to concealed or dissipated assets generally in cases such as Weir & Weir [1993] FamCA 3; (1992) FLC 92-338.

Lawful Evidence Preservation

If you suspect undisclosed crypto, build the case from material you are entitled to have:

• bank and credit card statements showing transfers to or from exchanges;
• exchange account statements, records and transaction exports;
• tax returns, capital gains schedules and other Australian Taxation Office material;
• emails or letters confirming account opening, verification or transactions;
• wallet addresses and transaction identifiers that have been disclosed;
• company, trust and business records, including loan applications and financial statements;
• sworn financial statements and disclosure documents in the proceeding;
• expert blockchain analysis obtained appropriately, where it is justified.

What not to do. Do not access a former partner's exchange account, email, cloud storage, device or wallet using their credentials, and do not impersonate them to a provider. Do not photograph or copy a seed phrase or private key. Do not transfer, freeze or otherwise interfere with assets, and do not install tracking or monitoring software. Self-help digital investigation may be unlawful, may expose you to other legal consequences, can create side disputes about how material was obtained, and can materially damage your position in the proceeding.

Device inspection, forensic imaging, search orders and comparable relief are exceptional. Division 5.4.2 of the Family Law Rules provides for search orders, which require supporting affidavit evidence and are ordinarily made on terms governing execution, including, where applicable, execution supervised by an independent lawyer. Freezing orders under Division 5.4.3 have their own requirements and safeguards, and forensic imaging is governed by the terms of the order permitting it. Any such application should be evidence-based, targeted and proportionate, with proper attention to privacy, privilege and the digital security of live wallets. Routine imaging of a former partner's devices is not an appropriate starting point.

Preservation Orders and Injunctions

Crypto can be moved quickly, but speed alone is not a basis for relief. For married couples, section 114(1)(e) of the Family Law Act allows an injunction in relation to the property of a party to the marriage. For de facto financial causes, section 114(2A) provides the corresponding power, with sections 90SB and 90SK applying, and section 90SS confers general powers, including power to make any other order or injunction the court thinks necessary. A freezing order may also be sought under Division 5.4.3 of the Family Law Rules.

An application needs evidence of the risk, a proper legal basis, proportionality between the relief sought and the value at stake, and compliance with procedural safeguards, which commonly include undertakings by the applicant. Orders can be framed to restrain dealings with identified holdings, require preservation of records, or require notice before a disposal.

Valuation, Liquidity and Tax

Valuation. Values are usually taken at or near the date of hearing or agreement rather than at separation, but the date, the price source and any averaging method are matters of evidence rather than fixed rules. Holdings spread across several exchanges, thinly traded tokens, stablecoins that are not reliably at par, locked or staked assets and other illiquid positions may each need separate treatment and, where material, expert evidence. Our article on asset valuations in property settlements explains the general approach.

Liquidity and implementation costs. Realising a large position can move a thin market. Transaction fees, network fees, exchange charges and slippage between the intended and actual execution price are real costs and are best allocated expressly in the orders rather than argued about afterwards.

Tax. Disposing of a crypto asset is ordinarily a capital gains tax event, and the Australian Taxation Office treats exchanging or swapping one crypto asset for another as a disposal of the asset given up. Where the statutory conditions are satisfied, the relationship-breakdown rollover in Subdivision 126-A of the Income Tax Assessment Act 1997 (Cth) may apply; it ordinarily defers the tax consequences to the transferee's later disposal rather than removing them, and it cannot be promised for an informal transfer that does not meet the conditions. Complete acquisition and cost-base records should travel with any transfer. The personal-use asset exception is narrow and fact-dependent, and crypto acquired or held as an investment does not qualify. Income tax consequences may also arise from activities such as staking; the treatment depends on the facts, and specific advice is needed.

How a latent or contingent tax liability is treated is not fixed. It depends on whether a disposal is contemplated, the likelihood and timing of the liability, the evidence available and the orders proposed — not on a rule that the court must always work from a net after-tax realisable value. Our article on tax and capital gains in property settlements covers this in more detail.

Contributions, Post-Separation Changes and Wastage

Crypto often raises contribution questions that other assets do not. Relevant matters can include when the holding was acquired — before, during or after the relationship — where the purchase money came from, and what effort a party put into mining, staking, active trading or managing the portfolio.

Movements after separation are assessed on the evidence. Ordinary market gains and losses, and ordinary investment risk, are treated differently from deliberate or reckless conduct. Sections 79(5)(d) and 90SM(5)(d) direct attention to the effect of any material wastage of property or financial resources caused intentionally or recklessly by a party. Value that has been lost, sold or spent is not automatically added back dollar-for-dollar; older add-back authorities are exceptional and fact-dependent, and the current statutory wastage provisions are the starting point.

NFTs and Other Digital Positions

NFTs cannot be lumped together. Whether a token has value, and what it actually gives its holder, depends on the token and the rights associated with it. Holding a token does not by itself confer copyright, other intellectual property rights or ownership of an underlying real-world asset, and the terms of the collection or platform may matter more than the token itself.

Similar care is needed with staked or locked assets, vesting interests, decentralised finance lending and borrowing positions, liquidity pool interests, airdrops, forks and staking rewards. Each may have restrictions on transfer, an associated liability, or a timing constraint that has to be reflected in the orders.

Dividing Crypto and Drafting the Orders

There are three practical outcomes: transfer of the asset itself in specie, sale and division of the proceeds, or retention by one party with an offsetting adjustment against other assets. The court is not precluded from ordering a transfer in specie, and none of the three is invariably preferable — the right structure depends on liquidity, tax, risk appetite and the practical ability to complete a transfer.

Whichever route is chosen, the drafting should deal with:

• the token, quantity, blockchain or network, and contract address where relevant;
• the receiving wallet or custody arrangement, identified without disclosing any seed phrase or private key;
• the valuation source, exchange, date, exact time and time zone;
• who bears price movement between the agreement or order and completion;
• gas and network fees, exchange charges and slippage;
• locked, staked or vesting assets and any decentralised finance positions;
• forks, airdrops and rewards arising before completion;
• transaction history and tax cost-base records to be provided with the transfer;
• a small test transaction before the balance is sent, where appropriate;
• a completion deadline, confirmation of receipt, and a fallback if access or transfer fails.

Agreements are then formalised in the usual way — by consent orders or, where appropriate, a binding financial agreement.

Keeping the Investigation Proportionate

Specialist blockchain investigation can be expensive, and the cost is not always recovered. In most matters, targeted disclosure requests, exchange records, bank statements and tax material should ordinarily be considered first. That said, early specialist assistance can be justified where the value, complexity, urgency, risk of dissipation or the strength of the available indicators warrant it, rather than as a default response to suspicion.

When to Get Advice

Legal advice may be important where crypto forms part of the asset pool, and specialist forensic accounting, blockchain or tax input may be appropriate depending on the value involved, the complexity of the holdings, whether disclosure is disputed, how the assets are held or controlled, and the disposition proposed — particularly where assets sit within a company, trust or self-managed superannuation fund. Our Family Law team works with forensic accountants and tax advisers on settlements involving digital assets. If you are a de facto partner, our guide to de facto property claims explains the jurisdictional requirements and time limits that apply before any of this becomes relevant.

Frequently Asked Questions

Sources and Further Reading

• Family Law Act 1975 (Cth), consolidated text — sections 4(1), 71B, 79, 79A, 90RI, 90SB, 90SK, 90SM, 90SN, 90SS, 112AP, 114 and 114UB.
• Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) — Chapter 6, Part 6.1 (duty of disclosure, including rule 6.06) and Divisions 5.4.2 and 5.4.3 (search orders and freezing orders).
• Federal Circuit and Family Court of Australia — duty of disclosure
• Federal Circuit and Family Court of Australia — Practice Direction: financial proceedings
• Australian Taxation Office — crypto asset investments
• Australian Taxation Office — crypto-to-crypto exchange or swap
• Australian Taxation Office — crypto asset as a personal use asset
• Australian Taxation Office — when the relationship breakdown rollover applies