November 2025
While cryptocurrency and NFTs were rarely part of a high net divorce case, I now see them in virtually all matters. Like real estate investments, restricted stock units, wine and art collections, crypto currency and NFTs often comprise part of an individual’s high net worth portfolio. These digital assets bring a unique set of challenges when a marriage breaks down. They move quickly, can be held across multiple platforms, and can shift in value in the blink of an eye. They also are frequently and many times intentionally omitted from sworn statements of net worth. Unlike wine and art collections, they often don’t sit in plain sight and much like restricted stock units, your attorney must know to search for the tell-tale signs of their existence.
In my practice, I hear from more clients each year who want to understand how crypto will affect their divorce. Some are concerned that a spouse has transferred funds into digital wallets without telling them. Others have watched the value of these assets rise and fall with dramatic speed and want to know which date the court will use to value them. These concerns are real. However, when we slow down and examine the facts, New York law provides a clear structure.
Digital assets may feel new, but the principles that control disclosure, fairness, and transparency are not. It’s important to remember that the same rules that apply to traditional financial property also apply to crypto. This means it is important to carefully conduct discovery, make sure that your attorney is consulting with a forensic accountant or crypto expert if necessary and that you give your attorney to depose your spouse if necessary about these issues.
How New York Classifies Crypto and NFTs
New York courts treat cryptocurrency and NFTs as property. That means they can be either marital or separate property depending on when they were acquired, the source of the monies to make the acquisition and whether a valid prenuptial or postnuptial agreement applies. If a digital asset was purchased during the marriage, it is presumed to be marital and falls under equitable distribution. There are of course exceptions if the source of the monies to purchase the digital assets was separate property, including monies inherited, gifted exclusively to one spouse or which was premarital property.
This mirrors long-standing rules for savings accounts, checking accounts, investment portfolios, real estate, and even art. Many people assume crypto is similar to cash, but for legal purposes it is simply another form of financial property with a value that must be identified and divided.
I often tell clients that this is no different from other complex assets. The key question is when it was obtained and whether any agreement sets it apart as separate property. Of course, the other important aspect is identifying it in the first instance. Searching through account statements, conducting discovery and depositions will be imperative in this regard.
Cryptocurrency Earned as Compensation
One area clients do not always expect involves employment compensation. A spouse may receive part of a salary or bonus in cryptocurrency. This issue is explained in greater detail in my earlier blog on cryptocurrency in divorce. You can read it here:
Cryptocurrency in Divorce: How Is Cryptocurrency Handled in New York Divorces?
https://lisazeiderman.com/cryptocurrency-in-divorce/
This type of compensation is more common than many people realize. Executives, finance professionals, and others may receive payment in crypto as part of a salary package or as deferred compensation. Under New York law, crypto earned during the marriage is handled the same way as other income-based assets. It becomes part of the marital estate and must be valued and divided fairly.
Because these compensation structures can be complex, especially when tied to market performance or vesting schedules, it is important to work with someone who regularly handles executive and deferred compensation matters.
The Challenge of Finding Digital Assets
Clients often ask the same question. What if my spouse moved money into crypto to hide it?
It happens. Cryptocurrency is sometimes used to conceal assets because digital wallets can be opened in minutes and transfers can happen without the same oversight as a bank account. But difficult does not mean impossible. In fact, a recent CNBC article detailed how blockchain investigators traced hundreds of thousands of dollars in hidden crypto during a divorce by following digital clues left on the blockchain. These real world examples show that crypto can be traced.
https://www.cnbc.com/2023/05/20/bitcoin-in-divorce-how-spouses-hide-assets-crypto-hunters-find-them.html
Discovery in a high net worth divorce includes more than account statements. It can involve tax records, online exchange histories, device logs, blockchain data, and other digital evidence. Forensic accountants use blockchain analysis to follow the movement of tokens from one wallet to another. Even with decentralized platforms, every transaction leaves a permanent record.
When a spouse tries to hide money through crypto, the blockchain often tells the real story. That is why having attorneys and forensic experts who understand this technology is essential.
The Volatility Problem
Crypto and NFTs are known for dramatic price swings. This leads to an important question. When should the asset be valued?
New York law distinguishes between passive and active assets. Crypto is usually a passive asset that can change in value based on market conditions. For that reason, courts may value crypto at the date of trial or another fair date, not simply the date the divorce was filed.
That difference can be significant. The value might double over two years, or it might decrease dramatically. High net worth cases often rely on financial experts who can provide updated valuations and explain how market changes affect the asset.
Understanding the Tax Consequences
Another issue clients should consider is the tax impact. Selling or transferring cryptocurrency can trigger capital gains taxes. If the parties choose to liquidate digital assets to divide the proceeds, the tax bill must be addressed clearly.
The agreement must explain who pays the tax, how gains are allocated, and what happens if the market shifts before the transfer is complete. I often remind clients that taxes can alter the true value of the asset they receive. Planning for these costs up front avoids conflict later. Making sure that you and/or your attorney consult with a tax attorney or accountant is important. It is also critical that you remember when you are trading assets during a negotiation that not every asset is created equally. Keeping in mind tax implications is especially important when trading assets during your divorce. Every value is not created equally as some may be tax free such as cash accounts while others have capital gains taxes upon liquidation. In the case of retirement accounts, there may be a taxable event when withdrawing monies and even penalties for early withdrawal.
Why Crypto Creates New Opportunities for Concealing Assets
Hidden assets are not new in divorce. People have always found ways to hide money. I will always remember the cases for example where the money allegedly set aside in safety deposit boxes suddenly goes missing. Cryptocurrency is just another method. Its decentralized structure makes it appealing to those who want to secrete assets.
But whether the hidden asset is a bank account, an investment in a private company, restricted stock units, a piece of valuable art, that very expensive wine or a digital wallet, the principle remains the same. And while full disclosure is required, you still need an attorney who is willing and capable of conducting that very important discovery, particularly in high net worth divorce cases. When crypto is involved, it becomes even more important to work with a lawyer and a forensic team who handle these issues regularly and understand both the financial and behavioral signs of hidden assets.
A Clear Path Forward
Digital assets may feel unfamiliar, but the core questions remain. What assets exist? What are they worth? And how should they be fairly divided?
With the right team, including experienced forensic accountants, these questions can be answered. In my practice, I work closely with experts who uncover hidden assets and help clients understand the full financial picture before negotiating a settlement.
If your divorce involves cryptocurrency, NFTs, or concerns about hidden assets, you should not navigate these issues alone. I can help you understand your rights and create a plan that protects your financial future.
Contact me to discuss your situation and your next steps.
Lisa Zeiderman, Esq.
New York Matrimonial and Family Law Attorney