You’ve heard of a high-asset divorce and a high-conflict divorce – but we’ve entered the age of the high-tech divorce.
Last month, in an article for CNBC CryptoWorld, reporter Kevin Williams offered new insight on a topic we’ve covered here before – the role of digital assets in divorce – particularly among millennial couples.
Williams’s article, “Married Millennials, Here Comes the Crypto Divorce Cliff,” examines this still-being-charted landscape, explains how divorce law is evolving around it (struggling to keep up), and highlights some scary pitfalls.
As Williams points out, asset division is typically one of the thorniest aspects of divorce. This is true even in California, where community property law aims to simplify the process by dictating that, with few exceptions, all assets acquired during a marriage are considered shared property, which the court will divide 50/50 in a divorce. Each partner is required to disclose 100% of their assets.
Digital assets are, in theory, no different – they’re subject to community property law and must be disclosed. In practice, however, cryptocurrency, NFTs, and digital collectibles can present real challenges.
“The crypto wealth accumulation phase [is] still new within many households,” says Williams. And, recent big dips in value among certain currencies, including Bitcoin and Ether, have made crypto’s future unclear.
But what’s especially concerning for troubled couples is the lack of transparency: many spouses – presumably even those already in the dissolution process – aren’t tracking the value of their crypto assets simply because they don’t know what they own. If one partner is feeling secretive or vindictive, digital assets are easier to “squirrel away” than many other forms of property or money.
The concealment of assets isn’t a new problem. “In divorce cases, crypto is creating the same headaches we’ve long seen with offshore accounts,” Mark Grabowski, professor of cyber law and digital ethics at Adelphi University and a crypto expert, told Williams. What is new is that “now the assets can be moved instantly and invisibly.”
Grabowski explained that while traditional accounts have statements and clear documentation, ownership of digital currency “isn’t determined by a name on an account — it’s determined by who holds the private keys,” says Williams. “If one spouse controls the wallet, they effectively control the assets,” Grabowski said.
Currently, there’s a lack of reporting standards for crypto, so without built-in transparency, it’s simply much easier to hide or underreport. Divorce attorneys face a wild goose chase: they have to “subpoena exchanges, trace transactions on the blockchain, and determine whether coins were purchased before or during the marriage,” Williams said. It’s “part detective work and part digital forensics.”
Lawyers first need to track down what assets exist and who owns the wallets. The private key to a digital account gives the holder total control, which means security becomes an issue – raising questions of how the court enforces access to the assets.
Roman Beck, a Bentley University professor and head of their Crypto Ledger Lab, says that since wallets can’t be safely shared post-divorce, the legal question “is not ‘Who gets the wallet?’ but ’How do we allocate the economic value the wallet represents, and who is trusted with technical custody afterward?’”
Valuation (for equal division) can be challenging, especially if the attorney doesn’t understand a lot about crypto and its volatility.
Digital assets can also have significant tax implications.
As for the courts, they are “still catching up,” Grabowski said.
In many states, financial affidavits still don’t specifically demand or provide a designated space for disclosing digital holdings during the divorce process. (California’s do).
In California, the 2025 Digital Financial Assets Law clears up some of the gray area surrounding digital assets. Although the law is aimed at businesses and does not specifically apply to divorce, it impacts dissolutions in the way it recognizes and treats digital assets in legal contexts. It lays out exactly what qualifies as a digital asset, standardizes valuation methods, distinguishes between types of assets and how they’re treated, recognizes specific forensic tools and mechanisms for tracing, sets strict deadlines for disclosure, and imposes stiff financial penalties for hiding digital assets.
However, Beck also emphasized that public blockchain (such as bitcoin) provides a permanent transparent ledger that is readily traceable for those who know how to read it. The ability to track down many digital assets, therefore, is more about forensics than law.
Millennial Marriages, High-Tech Divorces
According to recent data from Bowling Green State University’s National Center for Marriage and Family Research, while the overall divorce rate is declining, this statistic “masks substantial variation by age.” Their study shows that between 1990 and 2021 the divorce rates increased for both women and men aged 45 and older. The oldest Millennials (born 1981-1996) turn 45 this year.
Experts, both legal and financial, consulted for the CryptoWorld article noted that these issues surrounding digital assets and divorce are becoming more urgent. This year, millennials – the generation that holds the most crypto – is officially “approaching peak divorce years.”
The veteran California family lawyers at SFLG are skilled in handling high-net-worth divorces and complex financial portfolios, including digital assets.
by Debra Schoenberg
