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Cryptocurrency continues to gain popularity as an asset class, with each year seeing more and more Australians buying these virtual currencies. A statistic from the cryptocurrency exchange Independent Reserve confirmed that so far for the year of 2025, 31% of Australian adults own or owned cryptocurrency, a 3% increase from 2024. For this reason we have published a guide for Lawyers When Using Crypto in Property Settlements
As the number of individuals purchasing cryptocurrency increases, the number of family law cases involving cryptocurrency also increases.
Like all property in family law matters, cryptocurrency falls under the Family Law Act 1975. While the law does not make a direct reference to cryptocurrency, it is generally treated as property and is subject to division like any other financial asset.
The Fundamentals of Cryptocurrency
While there is an increase in the number of Australians purchasing cryptocurrency, there are still many elements of cryptocurrency and the accompanying infrastructure that are poorly understood, even to those buying them.
An important thing to understand is that most cryptocurrency is pseudonymous, except for a few completely anonymous tokens. This means that transactions are not linked to an individual’s name but rather to a wallet address that is owned or controlled by the individual. This means that transactions cannot be linked to specific individuals without knowing what wallet addresses they control.
A wallet address is a random sequence of numbers and letters used to receive and store cryptocurrency, and varies in format depending on the cryptocurrency they are generated for. It provides just the right amount of information to ensure that funds are sent to the right place, without disclosing any personal information, maintaining the pseudonymous nature of cryptocurrency.
Another crucial thing to understand is the Blockchain, the publicly available record of all cryptocurrency transactions that underpins the functionality of cryptocurrency. It is important to understand, however, that the Blockchain is not searchable by name or personal information. Yes, you can search wallet addresses to see any previous transactions sent or received, but there is no way to search an individual’s name and identify their cryptocurrency holdings.
The Flow of Crypto Funds
The buying and selling of cryptocurrency predominantly occurs on cryptocurrency exchanges like CoinSpot or Binance. An exchange is a digital marketplace for cryptocurrency, where fiat currencies like Australian dollars can be used to buy and sell cryptocurrency such as Bitcoin or Ethereum. Exchanges often also allow users to buy and sell between cryptocurrencies, such as using Bitcoin to buy Ethereum.
The user will commonly deposit money from their bank into their exchange account, where it can then be used to purchase cryptocurrency. The cryptocurrency will then be held in the wallet addresses of the exchange on behalf of the user.
However, many users prefer to hold their cryptocurrency in their own wallet and will transfer their holdings off the exchange to a hardware wallet like Ledger. Hardware wallets are self-custodial wallets designed to provide secure storage for cryptocurrencies by using offline private keys for secure access to the cryptocurrency. Self-custodial wallets mean that only the user has control of the assets, as opposed to when cryptocurrency is stored with an exchange, the exchange is technically in possession of the cryptocurrencies on behalf of the individual. Just like the funds someone holds in their bank account, technically, the bank is in possession of the individual’s funds.
Once someone is ready to sell their holdings, they will need to send the cryptocurrency to an exchange account, where it can be sold for fiat currency that can be withdrawn from the exchange to the user’s bank account. Below provides a simple visualisation of someone sending Australian dollars from their Commonwealth Bank account to the crypto exchange, CoinSpot. At CoinSpot, the individual purchases Ethereum (ETH), and then sends the ETH to their Ledger wallet (their private wallet). From there, the user decides it is time to sell the cryptocurrency, or for whatever reason decides to store the assets on their Binance account, and send the ETH to the cryptocurrency exchange, Binance.
Looking at a practical example of the flow of funds in Cryptocurrency Analysis and Tracing software (we will discuss tracing software in more detail later on), we can see how we would analyse transactions to visualise the movement of funds on the Blockchain.
What this means is that an individual’s cryptocurrency holdings can be difficult to locate, as they may hold funds in numerous places and may have several different exchange accounts, software or hardware wallets.
Where to Start
It can often be hard to identify where to start when it comes to investigating cryptocurrency, as there are a lot of unknowns. Often, the first step in these cases is to ask the other party to disclose all their cryptocurrency holdings and relevant transaction history. The Family Law Act 1975 requires that both parties provide full and frank disclosure of all their assets (including cryptocurrency) during family law proceedings.
However, in our experience, rarely are complete records provided. If you rely on the honesty of the other party, you may miss finding hidden assets. It is common for parties to claim that they no longer have ownership of these assets or have lost access to them. Analysis of the relevant records is an important part of verifying or refuting these claims.
Identifying Cryptocurrency Exchanges Accounts
If someone wants to buy cryptocurrency, then they generally need to use a cryptocurrency exchange. Unlike wallet addresses, exchange accounts are usually always registered to an individual with exchanges requiring identification as part of their Know Your Customer (KYC) requirements. Before an exchange allows an Australian individual to open an account to start buying or selling crypto, the user will be forced to verify their identity. This is likely to include providing ID documents and possibly even providing a selfie or completing biometrics.
If the other party has failed to disclose cryptocurrency holdings, or you suspect they have not been completely transparent, it may be necessary to verify for yourself what cryptocurrency has been purchased.
The first step we recommend is an assessment of bank statements of the other party to determine if funds were sent to an exchange to purchase cryptocurrency.
When conducting an assessment of a bank statement, it is important to look for consistent withdrawal transactions to different companies. From here, you can verify if the company or entity is an exchange and then conclude that funds have been transferred with the intention of purchasing cryptocurrency.
“Crypto can be a safe, efficient settlement tool—if you treat it like any other asset with clear controls. Identify the wallets, agree the valuation date and currency (often a stablecoin), and mandate an auditable transfer via a reputable exchange or escrow. Build in evidence preservation and tracing rights, so if funds go missing, we can follow the on-chain trail and act fast.”
Dan Halpin, CEO, Cybertrace
It is important to note that bank transactions will not always list the name of the exchange the funds have been sent to. For example, if you identify consistent transfers to the company “Investbybit Pty Ltd”, you are actually confirming that funds were sent to Binance Australia, and this individual has very likely purchased cryptocurrency.
Once an exchange is identified, the next step is to subpoena records from the exchange to obtain the individual’s history of purchases, transactions and current holdings. The exchange account statements are the beginning of the trail of cryptocurrency assets.
Crypto Exchange Account Statements & Exports
It can be hard to know what information to request from the exchange when you have not seen records provided before.
Below is a list of the categories within a CoinSpot End of Financial Year statement that can be subpoenaed and assessed to determine if cryptocurrency was purchased and subsequently transacted to an unknown wallet address.
- Balance summary – Amount currently held in the exchange account in either fiat currency or cryptocurrency.
- Fee summary – The amount of fiat currency spent on fees for buys and sells.
- Transaction history – A history of buys and sells, highlighting which fiat currency was used and which cryptocurrency was bought.
- Deposit history – A history of fiat currency deposits into the exchange account.
- Withdrawal History – A history of fiat currency withdrawals from the exchange account.
- Send transaction history – A history of crypto transactions sent to external wallet addresses.
- Receive transaction history – A history of crypto transactions received into the exchange account from external wallet addresses.
If you are unsure what to request from an exchange, Cybertrace advises that you start by requesting a full account export, as this should include all relevant information. Cybertrace can filter through the unnecessary information or point you in the right direction to obtain the necessary information.
Above is an example of a send and receive export from CoinSpot. This specific export includes all the necessary information to conduct Blockchain Forensics and Tracing, including the transaction date, a wallet address, a blockchain transaction ID (Txid), the asset sent, the amount sent and the fee for the transaction.
Unfortunately, not all exchanges provide records this clear and therefore it can be challenging to assess and determine how to proceed.
When it comes to Txids, there can be some confusion, as exchanges such as Kraken will assign a Txid specific to their internal system that is not searchable on a blockchain. A key identification of this is a string of numbers broken with dashes as seen below:
LTDGQS-YGNDF-RWAPMZ
To conduct an investigation, proper blockchain transaction IDs will be required, as seen below:
5fcaef08bafe1beb3dbf0365d88842052e6ebac79b4f1c97c4a692f38b1b3903
If you were to search this transaction ID in the open source blockchain explorer, oklink.com, you would see that 50,000 USDT was sent from one wallet address to another, as seen below.
If you are unsure if a transaction ID is the correct blockchain one, it may be necessary to check with several different explorers to confirm the cryptocurrency and blockchain involved in the transaction. Some other commonly used explorers are etherscan.io, used for Ethereum and other Ethereum-based cryptocurrencies and www.blockchain.com, which can be used to look at Bitcoin transactions.
Why Crypto Exchange Records Can Change the Whole Case
The other party’s exchange account records show key pieces of information, such as what amount of fiat currency was deposited into the account and what was done with the fiat currency from there. Any number of actions could have taken place within the account, including buying crypto, selling crypto or sending crypto out of the account to another wallet address.
While there is a lot of information within these exports, the records of the other party sending cryptocurrency to external wallet addresses is arguably the most important when it comes to these cases.
Exchange account records may not show any crypto currently held at the exchange, but funds may have been transferred to an external wallet that the individual controls, to a hardware wallet or to an account with another exchange. Cryptocurrency tracing can be used to determine where the funds went once they left the exchange and to identify other connected wallet addresses or exchange accounts that may belong to the individual.
Cryptocurrency tracing can be a complicated process; though blockchain records are publicly available, they can be difficult to interpret. Investigators and law enforcement use specialised tracing software like Chainalysis to identify exchange wallet addresses, connections between wallets, and to analyse the flow of funds.
Cryptocurrency Tracing Software
As previously mentioned, open source blockchain explorers like oklink.com can be a valuable tool for analysing cryptocurrency transactions and can provide useful insights.
The below image from oklink.com, shows funds going from the exchange wallet address labelled HTX. DepositAndWithdraw_1, to another unnamed wallet address. This record shows a user sending funds from their HTX exchange wallet address to another non-exchange wallet address.
However, when we look at this same transaction in Chainalysis Cryptocurrency Tracing Software, we can see that the funds are actually going to another exchange wallet address at the exchange Deriv.
The key to accurate crypto tracing is known as attribution data, records of what wallet addresses are associated with which exchanges or other cryptocurrency-related platforms. As we can see above, oklink.com has some attribution data and correctly identified the HTX exchange wallet address, however, the public records are far from complete, and the Deriv exchange wallet address was not identified.
Without accurate information, it can be easy to miss the exchange wallets or to follow funds past one exchange to another that is not connected to an investigation. For family law matters, this could mean missing exchange accounts or misidentifying records that are unconnected to the matter.
How Cybertrace Can Assist with Crypto in Property Settlements
Cryptocurrency can be extremely complex and confusing. Analysing records and drawing accurate conclusions is something that takes a lot of time, expertise and specialised software.
As the first company in Australia to provide cryptocurrency tracing to the public, Cybertrace is a leading expert in cryptocurrency tracing and provides investigation reports for criminal and civil legal matters in Australia and overseas. Cybertrace has extensive experience preparing blockchain forensics and crypto trace reports, recommendations and expert opinions for Family Law cases. As opposed to a forensic accountant that has knowledge in crypto, our team are investigators and bring a unique capability to actually find hidden assets.
In a recent case, the other party disclosed a holding of Bitcoin valued at around $4 Million in the current market. Through our team’s cryptocurrency investigation, an additional $3 Million worth of cryptocurrency was discovered.
In the scam world, people abuse the pseudonymous nature of cryptocurrency to ensure they cannot be held liable for transacting funds that they fraudulently obtained. Similarly, in the Family Law arena, individuals can hide cryptocurrency as there is generally no personal information to identify who they sent funds to.
Over the years, our team has provided knowledge, support and services to legal professionals requiring assistance in cases where crypto is involved. We remain dedicated to providing as much knowledge and expertise as possible, to continue to increase the understanding and capabilities of family law specialists. We hope that our guide for lawyers when using crypto in property settlements has assisted you. Feel free to contact us or leave a comment on this post should you need any further information.
