Bitcoin becomes a new challenge in divorce asset division: Russian lawyers say the anonymity of crypto assets makes court proceedings more complicated

March 6 News: As cryptocurrencies become increasingly popular in Russia, digital assets like Bitcoin are becoming complex issues in divorce proceedings. Several legal experts point out that due to the anonymity and private key control features of cryptocurrencies, courts face significant challenges in confirming asset ownership, calculating value, and executing property division.

Anastasia Madi, a family lawyer at Kislov & Partners in Russia, states that Bitcoin, altcoins, and stock options are considered “the most difficult assets to divide” in divorce cases. This is because these assets lack transparent records like traditional financial accounts and rely on private keys for access. If the holder refuses to provide relevant information, it is often difficult for the other party to prove the assets exist.

According to Russian law, legislative amendments in 2020 have classified cryptocurrencies as intangible property. This means that digital assets like Bitcoin purchased during marriage could be legally regarded as joint marital property and subject to division during divorce. However, in practice, courts need to first verify the existence of the assets and calculate their value in legal currency, a process that usually requires professional appraisers.

Madi notes that if one party transfers cryptocurrencies to a new wallet address or even hides private keys or passwords during litigation, the other party can hardly force the disclosure through traditional legal means. Without evidence, courts often find it difficult to rule on the division of such assets. Previously, a civil court in Krasnodar, Russia, dismissed a property division request because the parties could not prove the existence of the crypto assets.

Legal professionals believe that the privacy features of cryptocurrencies offer advantages in protecting personal assets but also introduce new legal challenges in marital property disputes. Lawyer Olga Dovgileva points out that blockchain platforms and overseas crypto service providers are generally not obligated to provide account information to Russian courts, further complicating case handling.

To address this issue, Russian lawmakers have begun discussing relevant regulations. State Duma deputy Igor Antronenko has proposed a draft bill suggesting that cryptocurrencies acquired during marriage should be considered joint marital property, while digital assets held before marriage or received as gifts should belong to the individual.

As the scale of cryptocurrency holdings continues to grow, legal experts expect the number of divorce cases involving Bitcoin and other digital assets to increase. Issues such as digital asset property recognition, ownership of crypto wallets, and valuation of crypto assets are gradually becoming new challenges for the judiciary.