During a family law property settlement, each party has a duty to make full and frank disclosures of their financial circumstances. Rule 6.06 of the Federal Circuit Court and Family Court Rules 2021 provide a comprehensive list of what types of disclosures each party must provide.
However, given cryptocurrency is a relatively new form of asset, the question arises as to whether cryptocurrency should be considered as a property and be included in family law property settlements.
Is Cryptocurrency Considered Property?
At present, no ruling has been made on this topic within Australia. Internationally, the most authoritative judgment in favour of finding cryptocurrency as property is the New Zealand High Court decision of Ruscoe v Cryptopia Ltd (in liq)  NZHC 728.
In Ruscoe, Justice Gendall of the New Zealand High Court considered the following factors when deciding whether cryptocurrency should be regarded as property:
- Whether cryptocurrency meets the four indicia of property set out by Lord Wilberforce in Ainsworth;
- whether the cryptocurrency was a chose in action, or a chose in possession;
- whether information can be property; and,
- whether there are any limitations imposed by public policy.
In essence, Justice Gendall reasoned that cryptocurrency is property according to the Ainsworth test because it is definable, identifiable by third parties, capable in its nature of assumption by third parties, and have some degree of permanence or stability. In light of the above, Justice Gendall concluded that cryptocurrency should be considered property.
Past Family Law Cases Dealing with Cryptocurrency
In the Australian family law case of Powell & Christensen  FamCA 944, the Court dealt with the husband’s cryptocurrency as a form of add-back to the final property settlement.
The facts of Powell & Christensen were that the husband invested $25,590 of the parties’ joint funds and $75,000 of his company’s funds into cryptocurrency. These investments, respectively, were valued at $9,145.82 and $35,000.00 at the time of the property settlement.
The Court reasoned that given the value of these investments have reduced significantly over the years, which in turn reduced the parties’ total asset pools, the father should therefore be responsible for bearing the losses he caused.
Conclusion & Our Services to You
Holistically, laws concerning cryptocurrency are still evolving. However, there is no doubt that cryptocurrency falls within the categories of financial interests that a party must disclose during a family law property settlement.
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Please note that this article does not constitute legal advice, and H&O Lawyers will not be legally responsible for any actions you take based on this article.