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Dealing with Cryptocurrency in Family Disputes

May 30, 2019

Parents in child support proceeding duel over justiciability of cryptocurrency assets

In M.M.D. v. J.A.H., a child support proceeding, the Applicant mother argued that the Respondent father had more income available to him to support their child than was indicated by the evidence he had led thus far. Specifically, she alleged that he had a large amount of equity in Bitcoin investments (over $9 million), the details of which he was failing to disclose. The judge agreed with the mother that it was clear that the father had more income than he was claiming for particular tax years but refused to impute income to the father from the Bitcoin investments, given the complexity of the asset and lack of evidence. The mother was awarded an interim payment from the father to retain an expert to analyze the Bitcoin assets. Regarding disclosure of evidence of the Bitcoin, the judge noted:

[138]      The Respondent has investments in cryptocurrency with a value of $9,502,416 as at February 8, 2019. He asks that only redacted documents related to this investment be produced to the Applicant and filed with the court.

[139]      The Respondent states there is a substantial risk that production of information could lead to attacks and give third parties the ability to access and perhaps steal these assets.

[140]      I have no expert evidence on this issue. It is clearly a volatile, emerging, intangible source of wealth which the courts will have to grapple with more frequently in future.

[141]      For purposes of this case, I find there is no prejudice to the Applicant if she receives the disclosure of the Respondent’s cryptocurrency assets in redacted form. There is a greater risk of prejudice to the Respondent if he is required to produce them in an unredacted form which could compromise the security of this substantial asset.

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