Bloomsbury Professional Law Insight - Cryptocurrency in Matrimonial Finance

To my son, Freddie, who continues to provide boundless inspiration for all that I do. To my father Paul, my mother Merle, my sister Paula and to my niece and nephew, Anna and Oliver Cooke, two superb lawyers who are destined for great things. DEAN ARMSTRONG KC \*\*\*\*\*\* To Anthony and Lorraine Samuels, who continue to be my guides in all things, and to the incomparable clerking team at 36 Family. MARC SAMUELS vi vii Contents Acknowledgments v Table of Statutes ix Table of Statutory Instruments xi Table of Cases xiii 1. Introduction 2. An introduction to cryptocurrency A. Introduction B. Types of cryptoassets C. What is cryptocurrency? D. Comparing transaction systems: 'traditional' finance v cryptocurrency E. The legal status of cryptocurrency in the United Kingdom F. Case study: the evolution of Bitcoin 3. Blockchain A. Introduction B. What is blockchain? C. How blockchain works D. The consensus mechanism E. Advantages and disadvantages of blockchain F. Applications of blockchain technology G. Smart contracts H. Non-Fungible Tokens 4. The cryptocurrency ecosystem A. Introduction B. Key players and key terms C. Top 10 cryptocurrencies by market capitalisation: Bitcoin, Ethereum, Tether, USD Coin, BNB, Cardano, XRP, Binance USD, Solana, Dogecoin 5. Regulation of cryptocurrency in the United Kingdom A. Introduction B. The FCA regulatory perimeter C. Financial regulation by category: security tokens, e-money tokens, exchange tokens, utility tokens, stablecoins Contents viii D. AML/CTF financing E. Regulatory developments in the UK 6. Overview of financial remedies and the Family Court A. Introduction B. The court's powers and statutory discretion C. The distributive principles D. Matrimonial and non-matrimonial property E. Special contributions F. Income G. Summary 7. Cryptocurrency as a matrimonial asset A. Introduction B. Are cryptocurrencies 'property' and why does it matter? C. Are cryptocurrencies divisible? D. Disclosure on Form E 8. Practical considerations in litigation A. Introduction B. Identifying and tracing cryptocurrency C. Valuation of cryptocurrency D. Disclosure, freezing orders, and preservation of devices E. 'Self-help' disclosure and associated criminal offences F. Taxation Index ix Table of Statutes Banking Act 2009 Pt 5 (ss 181-206B) . 1. Introduction 2. An Introduction to Cryptocurrency a. Introduction b. Types of cryptoassets c. What is cryptocurrency? d. Comparing transaction systems: ‘traditional’ finance v cryptocurrency e. The legal status of cryptocurrency in the United Kingdom f. Case study: the evolution of Bitcoin 3. Blockchain a. Introduction b. What is blockchain? c. How blockchain works d. The consensus mechanism e. Advantages and disadvantages of blockchain f. Applications of blockchain technology g. Smart contracts h. Non-Fungible Tokens 4. The Cryptocurrency Ecosystem a. Introduction b. Key players and key terms c. Top 10 cryptocurrencies by market capitalisation: Bitcoin, Ethereum, Tether, USD Coin, BNB, Cardano, XRP, Binance USD, Solana, Dogecoin 5. Regulation of cryptocurrency in the United Kingdom a. Introduction b. The FCA regulatory perimeter c. Financial regulation by category: security tokens, e-money tokens, exchange tokens, utility tokens, stablecoins d. AML / CTF financing e. Regulatory developments in the UK 6. Overview of financial remedies in matrimonial finance a. Introduction b. The Court’s powers and statutory discretion c. The distributive principles d. Matrimonial and non-matrimonial property e. Special contributions f. Income g. Summary 7. Cryptocurrency as a matrimonial asset a. Are cryptocurrencies ‘property’ and why does it matter? b. Are cryptocurrencies divisible? c. Disclosure on Form E 8. Practical considerations in litigation a. Introduction b. Identifying and tracing cryptocurrency c. Valuation of cryptocurrency d. Disclosure, freezing orders, and preservation of devices e. Self-help disclosure and associated criminal offences f. Taxation Acknowledgments Contents Table of Statutes Table of Statutory Instruments Table of Cases 1. Introduction 2. An introduction to cryptocurrency A. Introduction B. Types of cryptoassets C. What is cryptocurrency? D. Comparing transaction systems: ‘traditional’ finance v cryptocurrency E. The legal status of cryptocurrency in the United Kingdom F. Case study: the evolution of Bitcoin 3. Blockchain A. Introduction B. What is blockchain? C. How blockchain works D. The consensus mechanism E. Advantages and disadvantages of blockchain F. Applications of blockchain technology G. Smart contracts H. Non-Fungible Tokens 4. The cryptocurrency ecosystem A. Introduction B. Key players and key terms C. Top 10 cryptocurrencies by market capitalisation: Bitcoin, Ethereum, Tether, USD Coin, BNB, Cardano, XRP, Binance USD, Solana, Dogecoin 5. Regulation of cryptocurrency in the United Kingdom A. Introduction B. The FCA regulatory perimeter C. Financial regulation by category: security tokens, e-money tokens, exchange tokens, utility tokens, stablecoins D. AML/CTF financing E. Regulatory developments in the UK 6. Overview of financial remedies and the Family Court A. Introduction B. The court's powers and statutory discretion C. The distributive principles D. Matrimonial and non-matrimonial property E. Special contributions F. Income G. Summary 7. Cryptocurrency as a matrimonial asset A. Introduction B. Are cryptocurrencies ‘property’ and why does it matter? C. Are cryptocurrencies divisible? D. Disclosure on Form E 8. Practical considerations in litigation A. Introduction B. Identifying and tracing cryptocurrency C. Valuation of cryptocurrency D. Disclosure, freezing orders, and preservation of devices E. ‘Self-help’ disclosure and associated criminal offences F. Taxation Index This book explores the specialist area of cryptocurrency in the context of matrimonial finance proceedings. The work is split into two parts. The first part provides a comprehensive primer on cryptocurrency and blockchain technology. It explains what cryptocurrencies are, how they are held by their owners, and how blockchain technology works. This part also considers the legal status and current regulatory treatment of cryptocurrency in England and Wales. The second part provides an overview of financial remedies and the distributive principles applied by the Family Court in matrimonial finance cases. It analyses the current case law on cryptocurrencies as a variety of ‘property’, before exploring issues that practitioners may face when encountering crypto-assets in litigation. This includes the challenges of valuing, tracing, and freezing cryptocurrency, as well as disclosure considerations. The work includes an overview of the principles relating to ‘self-help’ disclosure and associated criminal offences pursuant to the Computer Misuse Act 1990 and the Data Protection Act 2018. It also contains a summary of HMRC’s current guidance on the taxation of crypto-assets for individuals. This title is included in Bloomsbury Professional's Family Law and Cyber Law online services.