Call me an experienced family lawyer or just old, but just before Christmas marked a first in my twenty plus years of working in family law when I witnessed a cryptocurrency transfer.
This might not sound so special, but for somone who came into the profession when typewriters were still being used and email had yet to be invented, it showed just how far technology has developed.
Ok, so what happened? Bitcoin is the name of the best-known cryptocurrency, the one for which blockchain technology was invented. A cryptocurrency is a medium of exchange such as the £ sterling, but it is digital and uses encryption techniques to control the creation of monetary units and to verify the transfer of funds.
A blockchain is a decentralised ledger of all transactions across a peer to peer network. Using the technology individuals can confirm transactions without the need for a central clearing authority or middle man. It’s like a giant ledger; being a secure record of all transactions, which is available to the public but cannot be changed or hacked
Whilst most people have heard of Bitcoin, some of the others such as Ethereum, Ripple and Litecoin, (there are many more) these are new assets which are now appearing upon client asset schedules.
I had read many articles and been to courses explaining the concept, but had still, to be honest, associated cryptocurrency dealings with the dark web. The majority of cases up until now have simply disclosed the assets and once a value had been agreed the individual with the holding has simply paid over a cash equivalent which has suited the other party. In this case both individuals sat before me were familiar with cryptocurrency dealings so a transfer and sharing was a logical solution.
Cryptoassets are held via digital wallets and are accessed using keys which are essentially sequences of numbers and letters which are written down or saved to a computer or USB drive, but are separate and not attached to the name or personal details of the owner.
This is perhaps where my age catches up with me and where I became concerned, as without the keys it is near impossible to identify what is owned and I understand that funds have been lost because people couldn’t find the keys upon the death of a spouse or family member. Note to all to ensure a will is made containing such information.
The assets are transfered upon a digital exchange, one of which is called CoinBase, this is a place where the owner has a platform in their name which allows them to sell, purchase and transfer their cryptoassets. It records the trades and the current value of holdings.
So in my case both parties attended the office with laptops and a sealed envelope, inside of which was a memory stick containing the keys. A quick check of the values and several key strokes later and the transfer was complete. A very swift and easy transaction that did not require money being passed through solicitors accounts. Both parties were happy.
The transaction would clearly have been very different had both parties not been familiar with cryptocurrencies or if one party had wanted cash instead, but the new experience is one of the reasons why I enjoy being a family lawyer as any case can through up something new and different and generally does.