Author: Wade From WuBlockchain

Preface: The division of cryptocurrencies in divorce cases has received more attention, and the following case is more typical and special in China because cryptocurrencies are not protected by Chinese law.

The following is a self-report from the contributor：

In June 2021, I found out that I could not log in to my account at Huobi , and then I found out that my bank card was also frozen, only to find out later that my wife had filed for divorce and property preservation. She knew I had assets in Huobi from my coin speculation.She should have heard that Huobi could freeze and then suddenly sued to try to divide the property. I was also surprised because I didn’t expect Huobi to be so cooperative with the judicial process, and my Alipay and WeChat were not frozen (the other party also applied, but Tencent and Alibaba didn’t cooperate). The assets frozen at that time were worth about 10 BTC (the price of BTC at that time was about 30k-40k USD), and I contacted Huobi to try to apply for unblocking the account, but Huobi replied with a template every time. I had no choice but to try to finish the lawsuit quickly to solve the problem.

The normal situation of the first time to sue for divorce in the case of no-fault party is not supposed to award divorce. But the result of the first trial surprised me. In the case of no-fault party, the judge subjectively considered that our relationship had broken down and divided the property 50/50. What surprised me even more was that the virtual currency in my Huobi’s account was directly ruled as RMB by the judge according to the estimated value given by Huobi, and I was told to deliver half of it to the other party. These coins I have not sold yet, the case has reached the execution stage and I am preparing for an appeal.

Q: What is the exact way of freezing?

A: I received an email notification from Huobi that I could not log in to my account, and I was still running grid trading at the time, and it continued to run after the freeze, and the grid trading was only suspended after the retirement notice was sent in September.

Q: Have you tried to communicate with customer service to resolve this?

A: I tried to try to communicate that this civil case should not be frozen, but customer service is always the email template answer, let me find the court executive board, find the executive board is to continue to fight this lawsuit. So during the period although the Huobi clear the mainland users, but my account has been frozen like that.

In general, there are few domestic cases regarding the division of crypto assets in divorce cases because of the problems of difficulty in obtaining evidence valuation, and enforcement. Among these difficulties, the difficulty in evidence includes both the difficulty in proving that the spouse holds cryptocurrency and that cryptocurrency is the joint property of the spouses. The legal status of cryptocurrency is currently not protected by law in China, so it is more difficult to protect by law in many civil lawsuits. The decision in this case is relatively rare. Source

But similar cases abroad are relatively abundant, such as the 2013 case of Francis, a San Francisco man who failed to disclose his bitcoin investments when he and his wife divorced. After three years of divorce proceedings, a San Francisco court ruled that Francis should be punished for failing to properly disclose his cryptocurrency investments and was required to distribute more than $6 million in bitcoin to his ex-wife. Source

In addition, some UK law firms have handled divorce cases where crypto assets were the primary assets, involving Bitcoin, Litecoin, Ripple and Ether. In a divorce, lawyers will require both parties to fill out crypto assets on a document called Form E. They will also analyze their bank statements, tax records, etc. to determine if there is any undisclosed behavior. If crypto assets cannot be found in the lawsuit, but there is evidence of crypto market activity, the court is entitled to draw an adverse inference that the assets do exist. Source

In most Western countries (including Canada, most of the United States and Europe), cryptocurrency is considered community or family property. Even if a spouse holds assets in his or her own name, cryptocurrency still needs to be divided. Some states in the United States (such as Pennsylvania and Idaho) have equitable distribution. Courts divide marital property and debts based on equitable principles and by analyzing various factors. Source

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