Cryptocurrency and Digital Assets in Property Settlements: Disclosure, Tracing and Valuation 

How is cryptocurrency treated in an Australian property settlement? 

Cryptocurrency must be disclosed and considered in a property settlement, including where it is held through an overseas exchange or private wallet. For high-net-worth individuals and business owners separating in Victoria, the immediate problem is often establishing what exists, who controls it and what it is worth. 

Cryptocurrency property settlements in Australia are governed by the Family Law Act 1975 (Cth). Section 71B requires married parties to give full and frank financial disclosure; section 90RI provides the corresponding duty for de facto parties. A portfolio does not fall outside that obligation because only one partner has access to it. 

Where holdings or transactions are disputed, wallet tracing and exchange records can help establish the evidence needed for negotiations or court proceedings. The valuation date also matters where prices move before settlement. 

For portfolios, records should distinguish transfers between wallets from sales or other disposals. Any claimed post-separation losses need supporting evidence. Without reliable transaction histories and current valuations, the parties may negotiate from materially different accounts of the same assets. 

What Laws Govern Cryptocurrency Property Settlements in Australia? 

For separating parties in Victoria, the Family Law Act 1975 (Cth) governs cryptocurrency property settlements in Australia. Section 79 applies to married parties; section 90SM provides the corresponding framework for eligible de facto couples. The court identifies existing property and liabilities, assesses contributions and current and future circumstances, and determines whether orders are just and equitable. 

Sections 71B and 90RI require timely, full, and frank financial disclosure, including during preparations for financial proceedings. This includes cryptocurrency holdings and relevant transaction records, whether assets are held on exchanges or in private wallets. Disclosure continues as holdings and values change. 

In Powell & Christensen [2020] FamCA 944, the father failed to substantiate his claimed cryptocurrency values despite disclosure orders. The court adopted corroborated purchase prices of AUD 75,000 for business holdings and AUD 25,590 for personal holdings as the best evidence of current value. This was an evidentiary response to non-disclosure, not a universal valuation rule. 

In Fallins & Fallins [2022] FedCFamC1F 495, the husband admitted losing AUD 100,000 on Bitcoin after separation. He claimed he had been scammed but had not disclosed the transactions in his affidavit. The court found wastage and included AUD 100,000 on his side of the property division. That decision predates reforms starting on 10 June 2025. 

In Shinohara & Shinohara [2025] FedCFamC1A 126, the Full Court held that section 79(3)(a)(i) requires identification of existing property. Spent funds cannot be inserted into the balance sheet as notional assets. Their use may instead inform contributions or current and future circumstances. For post-separation losses, section 79(5)(d) addresses the effect of material wastage caused intentionally or recklessly. An ordinary market decline does not, by itself, establish that test. 

Section 106B permits the court to restrain or set aside dispositions intended to defeat an existing or anticipated order, or likely to do so regardless of intention. Transferring cryptocurrency therefore does not necessarily place it beyond a property claim. 

Separately, the ATO treats crypto as a CGT asset when held as an investment. Tax consequences require consideration when structuring a sale or transfer, but do not determine either party’s family law entitlement. 

How Do Courts Assess Disclosure, Tracing and Valuation in Cryptocurrency Property Settlements in Australia? 

What records establish ownership and control? 

Courts need evidence identifying the holdings, the parties’ interests, and their value. Disclosure should include exchange statements, wallet addresses, transaction histories, and records linking purchases to bank accounts. Where a company or trust holds the assets, evidence must distinguish the entity’s ownership from a party’s interests. 

A screenshot showing a balance may leave material questions unanswered. Records should explain transfers, staking arrangements, and any lost access. Powell demonstrates the risk of asserting a reduced value without evidence capable of supporting it. 

How can exchange subpoenas and wallet tracing identify holdings? 

Where voluntary disclosure leaves gaps, exchange subpoenas may obtain relevant account and transaction records, subject to procedural requirements and objections. The correct exchange entity must be identified; obtaining records from an overseas operator may require additional steps. 

Wallet tracing can follow transactions recorded on a public blockchain, but a wallet address alone does not establish its owner. Exchange of identification records, bank transfers and other evidence may be needed to connect an address to a party. Tracing should also distinguish transfers between the same person’s wallets from actual disposals. The cost of forensic work should remain proportionate to the disputed holdings. 

What can ATO data matching reveal? 

The ATO data-matching programme obtains identification and transaction information from participating crypto service providers, including wallet addresses, deposits, and withdrawals. It is a tax compliance programme, not a tracing service available to separating spouses. 

Tax returns, crypto tax reports, and relevant ATO correspondence disclosed in proceedings may provide useful leads. However, parties should not assume that ATO data captures every wallet, or that its underlying records are automatically available for family law proceedings. 

Which valuation date should the parties use? 

The valuation date should reflect the stage at which the property division is being determined, rather than automatically adopting separation values. For negotiations, parties should agree on a common date and update material movements before finalising terms. 

Evidence should indicate quantities, AUD prices, and pricing sources. Thinly traded tokens, NFTs, or restricted holdings may require expert evidence addressing whether the stated value is realistically obtainable. Potential tax consequences also require separate assessment. 

How are post-separation gains and losses assessed? 

Separation does not automatically exclude later gains from consideration. Existing holdings and their value remain relevant, alongside the parties’ contributions and circumstances. 

For post-separation losses, distinguish market movements from disposals, scams, and alleged wastage. Fallins illustrates the consequences of undisclosed speculation; Shinohara requires spent funds to be considered through the statutory assessment rather than inserted as existing assets. An adjustment depends on the evidence and applicable statutory factors, not merely the size of the loss. 

What Disputes Arise Over Cryptocurrency in Australian Property Settlements? 

Disputes often turn on the gap between money transferred into cryptocurrency, and the holdings later disclosed. In Powell & Christensen [2020] FamCA 944, the father could track transactions but did not provide the records needed to substantiate his claimed values. He relied partly on business accounts and a valuation report that repeated his figures. The court found that those sources did not independently corroborate the cryptocurrency values. For business owners, this distinction matters: an accountant’s report cannot resolve missing transaction evidence merely by adopting the client’s records. 

The dispute also crossed personal and business finances. Cryptocurrency had been purchased using both joint funds and company money, with business purchases made contrary to a restraint on dealing with property. Identifying the source of funds was therefore essential to understanding the holdings and the father’s conduct. In substantial portfolios, wallet tracing should be reconciled with company accounts so that the same holding is not counted both separately and within a business valuation. 

Claimed losses raise a different evidentiary problem. In Fallins & Fallins [2022] FedCFamC1F 495, the husband’s expenditure of AUD 100,000 on Bitcoin emerged during cross-examination. He asserted that a scam had caused the entire loss but had omitted the transactions from his affidavit. The court treated the expenditure as wastage. The practical issue was not simply an unsuccessful investment: it was the use of funds, the absence of disclosure, and the explanation advanced only at trial. 

Those facts must now be analysed within the amended framework. Shinohara & Shinohara [2025] FedCFamC1A 126 concerned spent property generally, rather than cryptocurrency. It confirms that funds no longer held cannot simply be reinstated on the balance sheet. A party alleging post-separation losses must distinguish assets that still exist but have fallen in value from funds lost or spent. The opposing party needs evidence supporting any alleged intentional or reckless material wastage. Neither an unsupported claim that the money has disappeared nor an automatic demand to add it back resolves that enquiry. 

How Should You Prepare for a Cryptocurrency Property Settlement in Australia? 

Before negotiating a cryptocurrency property settlement, preserve the records needed to reconstruct the portfolio. Obtain exchange exports, bank statements, wallet addresses, and transaction identifiers, retaining original files. Record balances with their dates and pricing sources. A transaction history is more useful than a current balance alone because it can explain how the holdings changed after separation. 

Identify the precise disclosure gap before commissioning wallet tracing or seeking exchange subpoenas. Is the dispute about an undisclosed account, ownership of a wallet, missing sale proceeds, or an unsupported loss? Each requires different evidence. Targeted enquiries can control forensic costs and avoid collecting extensive transaction data that does not answer the disputed question. A party defending a non-disclosure allegation should reconcile the records and explain discrepancies promptly. 

Where transfers threaten the property available for division, obtain advice about preservation orders without waiting for the tracing exercise to finish. Relief under section 106B concerning transactions to defeat claims requires attention to the disposition, its effect on an existing or anticipated order, and any affected third parties. 

Settlement terms should specify the valuation date, quantities, AUD conversion method, and responsibility for implementing any transfer. Address price movements between agreement and completion, transaction fees and tax consequences, including whether any relationship breakdown rollover applies. Avoid treating a quoted portfolio value as equivalent to immediately available cash. 

For post-separation losses, prepare a chronology connecting investment decisions, disclosure, transactions, and the resulting financial position. The evidence should support the statutory assessment of contributions and current and future circumstances, rather than assume that a historical loss will be reimbursed dollar for dollar. 

If concealed holdings emerge after final orders, seek advice about setting aside property orders; non-disclosure must satisfy the applicable statutory ground, and relief is not automatic. 

What Should You Do Next If Cryptocurrency Forms Part of Your Property Settlement? 

Resolving a cryptocurrency property settlement requires reliable evidence of ownership, transactions, and current value. Missing records can undermine a claimed valuation, while post-separation losses require scrutiny of the conduct involved and its financial effect. The practical priority is to establish the holdings before negotiating how they should be divided, with clear terms addressing price movements, transfers, and tax. 

Pentana Stanton Lawyers advises on high-net-worth property settlements involving business interests and complex financial arrangements. If digital assets form part of your separation, book a consultation to discuss disclosure gaps, valuation evidence and the steps needed to protect your position. 

This article is general information only and not legal advice. For advice specific to your circumstances, please contact our team.