New York has no special divorce statute for cryptocurrency. Courts classify, value and divide bitcoin, ether and other digital assets under the same equitable distribution rules that apply to stock and real estate. What makes crypto different is practical: prices swing sharply, wallets can be hard to find, and every coin carries a tax basis that someone has to track.
Is cryptocurrency marital property in a New York divorce?
Marital property is all property acquired by either or both spouses during the marriage and before a separation agreement is signed or a divorce action is started, "regardless of the form in which title is held" (Domestic Relations Law (DRL) § 236(B)(1)(c)). It does not matter whose name is on the exchange account or who holds the private keys.
Coins bought with marital earnings, crypto received as pay for work done during the marriage, and mining or staking rewards earned during the marriage with marital assets are presumptively marital. New York treats property acquired during the marriage as marital unless it is clearly separate, and the spouse who claims an asset is separate bears the burden of proving it (Fields v. Fields, 15 N.Y.3d 158 (2010)). Marital property is then divided "equitably," which means fairly in light of the statutory factors, not necessarily equally (DRL § 236(B)(5)(c)–(d)). Our guide to equitable distribution in New York explains those factors.
When crypto can be separate property
Separate property includes property acquired before the marriage, property received by inheritance or as a gift from someone other than your spouse, property acquired in exchange for separate property, and property the spouses describe as separate in a valid written agreement (DRL § 236(B)(1)(d)). So bitcoin bought before the wedding can remain separate, and so can ether you later bought by trading that bitcoin, if you can trace the exchange.
Tracing means following an asset from its separate source to what you hold today, using exchange statements, wallet addresses, transaction histories and tax filings. Mixing makes it harder. Funds in a joint account are presumed to be marital, although that presumption can be rebutted, for example by tracing the money to a separate source and showing it was placed in the joint account for convenience (Ramadan v. Ramadan, 195 A.D.3d 1174 (3d Dep't 2021)).
What happens to the appreciation of premarital crypto?
An increase in the value of separate property is generally separate as well, "except to the extent that such appreciation is due in part to the contributions or efforts of the other spouse" (DRL § 236(B)(1)(d)(3)). Growth in coins you held before the marriage that is driven only by market prices generally remains separate. Whether gains from active trading during the marriage stay separate depends on the facts, including whose money and efforts produced them.
When is cryptocurrency valued in a New York divorce?
Soon after the case is filed, the court sets the date or dates for valuing each asset. The valuation date may be "anytime from the date of commencement of the action to the date of trial" (DRL § 236(B)(4)(b)), so a date before the filing, such as the day the spouses separated, is outside the window. The court has broad discretion and may use different dates for different assets (Lieberman-Massoni v. Massoni, 215 A.D.3d 656 (2d Dep't 2023)).
Courts distinguish two kinds of assets (Halley v. Craven, 236 A.D.3d 512 (1st Dep't 2025)):
- Passive assets, "whose values are affected by outside influences such as inflation or market forces," are generally valued as close to the trial date as possible.
- Active assets, whose values are affected by the efforts of the spouse who holds them, such as a business, are generally valued as of the date the case was started.
Crypto held as an investment rises and falls with the market, which points toward a valuation at or near trial, though the court decides asset by asset. The choice can matter. For example, if a spouse's crypto was worth $100,000 when the case was filed and $60,000 at trial, choosing one date over the other moves $40,000 of value. One way to avoid that fight in a settlement is to divide the coins themselves, so both spouses share future price swings.
Widely traded coins can usually be valued from exchange price data. Thinly traded tokens and NFTs may call for an expert, and each expert a party expects to call at trial must file a written report no later than 60 days before the trial date (22 NYCRR 202.16(g)(2)).
Disclosing cryptocurrency on the Statement of Net Worth
In a contested New York divorce involving support or property division, each spouse must exchange and file a sworn statement of net worth (DRL § 236(B)(4)(a); 22 NYCRR 202.16). It must include "all income and assets of whatsoever kind and nature and wherever situated," plus a list of assets transferred in any manner during the preceding three years or the length of the marriage, whichever is shorter, and it must be accompanied by the most recently filed state and federal income tax returns.
The statement must substantially follow the official form (22 NYCRR 202.16(b)). The current Statement of Net Worth, revised January 1, 2026, has its own cryptocurrency section. For each holding it asks for the platform, custodian and wallet; the acquisition date, the spouse who acquired it, the source of funds and the original price; and the value at the date of marriage, when the case was started, and now. It is signed as an affirmation under penalty of perjury. Before the preliminary conference, each side must also exchange three years of tax returns and account statements.
No selling or moving crypto once the case is filed
New York's automatic orders bind the filing spouse as soon as the summons is filed and the other spouse once served. Neither spouse may "sell, transfer, encumber, conceal, assign, remove or in any way dispose of" property without written consent or a court order, except in the usual course of business, for customary household expenses or for reasonable attorney's fees (DRL § 236(B)(2)(b)). A 2025 amendment confirms the orders last until the judgment of divorce. If you trade crypto regularly, talk to your lawyer before trading after the case begins. See our article on automatic orders.
Hidden cryptocurrency: warning signs and tracing
Crypto can sit on several exchanges or in a self-custody wallet that exists only as a recovery phrase. But many blockchains are public ledgers, so once one address or account is known, transfers can often be followed. Warning signs include:
- transfers from bank or credit card accounts to crypto exchanges;
- a "Yes" answer to the digital asset question on a federal tax return, which asks whether the filer received, sold, exchanged or otherwise disposed of a digital asset during the year (merely holding crypto does not require a "Yes");
- a Form 1099-DA from a broker, which custodial platforms must issue for sales on or after January 1, 2025; and
- hardware wallets, exchange apps or written recovery phrases.
Discovery demands and subpoenas can produce exchange records, and a forensic accountant or blockchain analyst can trace transfers. Tax returns also limit what a spouse can argue: "A party to litigation may not take a position contrary to a position taken in an income tax return" (Mahoney-Buntzman v. Buntzman, 12 N.Y.3d 415 (2009)).
If a party willfully fails to disclose information the court finds should have been disclosed, the court may make orders it finds just, including deeming the related issues resolved against that party, barring evidence, or striking pleadings (CPLR 3126). In dividing property, the court may also consider "the wasteful dissipation of assets by either spouse" and transfers "made in contemplation of a matrimonial action without fair consideration" (DRL § 236(B)(5)(d)(12)–(13)).
Tax issues when dividing cryptocurrency
Transfers between spouses are generally tax-free. The IRS treats digital assets as property, not currency. No gain or loss is recognized on a transfer of property to a spouse, or to a former spouse if the transfer is incident to the divorce, meaning it occurs within one year after the marriage ends or is related to the end of the marriage (26 U.S.C. § 1041). The rule does not apply if the receiving spouse is a nonresident alien. Selling crypto to split the cash is different: a sale is generally taxable to the seller. Confirm how these rules apply to you with a tax professional.
The receiving spouse takes over the original basis. After a transfer covered by § 1041, the receiving spouse's basis is the transferring spouse's basis, generally what was originally paid. For example, $50,000 of bitcoin bought for $10,000 carries a $40,000 built-in gain that may be taxed when the coins are sold, while $50,000 in a bank account carries none. The court may consider "the tax consequences to each party" in dividing property (DRL § 236(B)(5)(d)(11)), and spouses negotiating a settlement can compare assets after tax.
Crypto income counts for support. The IRS treats crypto received for services, and mining and staking rewards, as taxable income. For child support, income starts with gross income "as should have been or should be reported" on the most recent federal return (DRL § 240(1-b)(b)(5)(i)), and maintenance uses the same definition (DRL § 236(B)(6)(b)(4)). Crypto income left off a tax return can still be counted.
Planning for crypto in a prenup or postnup
Property described as separate in a valid written agreement is separate property (DRL § 236(B)(1)(d)(4)). To be enforceable in a divorce, a prenuptial or postnuptial agreement must be in writing, signed by both spouses and acknowledged in the manner required to record a deed (DRL § 236(B)(3)). Terms worth considering for crypto include:
- a schedule of each spouse's holdings at signing, with platforms, wallet addresses, acquisition dates and cost basis;
- whether appreciation, staking rewards and coins acquired by trading separate coins remain separate;
- how crypto will be valued and divided, including the price source and date, and who bears the tax on built-in gains; and
- how wallet access will be handled, so neither spouse is locked out of shared assets.
See our guides to prenuptial agreements in New York and postnuptial agreements for the execution rules and the standards courts apply.
Frequently Asked Questions
Is cryptocurrency marital property in a New York divorce?
Usually, if it was acquired during the marriage. New York treats property acquired by either spouse during the marriage, and before a separation agreement or the filing of a divorce action, as marital property no matter whose name or wallet holds it. Crypto owned before the marriage, inherited, or received as a gift from someone other than the spouse can be separate property, but the spouse claiming that must prove it.
What date is cryptocurrency valued at in a New York divorce?
The court sets the valuation date, which can be any date from the day the divorce action was started to the day of trial. Passive assets, whose values move with the market, are generally valued as close to trial as possible, while active assets, whose values depend on a spouse's efforts, are generally valued as of the filing date. Because crypto prices swing widely, the date chosen can significantly change the numbers.
Do I have to list cryptocurrency on my Statement of Net Worth?
Yes. The sworn statement of net worth must cover assets of every kind, wherever located, and list assets transferred during the past three years or the length of the marriage, if shorter. New York's current official form has a separate cryptocurrency section asking for the platform, wallet, acquisition date, source of funds and values. A spouse who willfully fails to disclose can face court-imposed penalties.
Is it taxable to transfer bitcoin to my spouse in a divorce?
Generally no. Under 26 U.S.C. § 1041, no gain or loss is recognized on a transfer of property to a spouse, or to a former spouse if the transfer is incident to the divorce, which includes transfers within one year after the marriage ends. The receiving spouse takes over the original cost basis, so tax may be due when the crypto is later sold. Different rules apply if the receiving spouse is a nonresident alien.
If cryptocurrency is part of your marital finances, Neuhaus & Yacoob can help you identify, value and divide it in a contested or high-net-worth divorce, or address it in a prenuptial agreement. Joel Yacoob, who is admitted in New York and New Jersey, handles every matter personally. To get started, complete our online intake form or call (718) 975-1123.
This article is for general information only and is not legal advice. Reading it does not create an attorney-client relationship. The law changes and every situation is different; consult a lawyer about your own circumstances.
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