Is Ningbo Bitcoin a common property?

Husband quietly bought bitcoin, does it count as the couple's common property when they divorce? The conclusion first said: although bitcoin and other virtual currencies are not legal currencies, they have property rights and interests as network virtual property protected by law. If they are acquired by the joint property of husband and wife during the existence of marriage relationship, they are generally recognized as the joint property of husband and wife. Due to its limited transaction and realization, the division is mainly based on negotiated discount, which is difficult to be divided in half in kind. The key to qualitative analysis lies in two sets of facts: the timing of acquisition and the sources of funding. This article synthesizes these factors by drawing on the Civil Code and the guidelines for family law adjudication in Ningbo.

1. Qualitative Starting Point: Is Virtual Currency "Property"

Article 127 of the Civil Code provides: “Where the law contains provisions on the protection of data and virtual property in the network, such provisions shall apply.” This leaves room for the legal status of virtual property in cyberspace. Although virtual currencies such as Bitcoin do not have the status of legal currency and cannot be circulated in the market as currency, for their holders, the virtual currency obtained through legal methods such as mining and transactions has property rights and interests-judicial practice It is generally recognized that it is a property protected by law and can become the object of inheritance, gift, and division of the joint property of husband and wife.

At the same time, it is necessary to remind the policy boundary: In September 2021, the People's Bank of China and other departments "Notice on Further Preventing and Disposing the Risk of Trading Speculation in Virtual Currency" made it clear that the business activities related to virtual currency are illegal financial activities, and the services provided by overseas virtual currency exchanges to domestic residents through the Internet are also illegal financial activities; but the notice regulates "business activities" and "trading speculation", it does not deny the property attributes of individuals legally holding virtual currency. In other words, virtual currency held by individuals and purchased with common property during marriage can still be divided as property rights and interests during divorce, but the "debt" and "income" formed through illegal domestic platform transactions may face validity review, and the division path is different from conventional property-this is the realistic reason why virtual currency division is "mainly based on negotiated discount.

2. Qualitative rules for divorce asset division: timing of acquisition and source of funds

Article 1,062 of the Civil Code stipulates that wages, bonuses, investment income, and other earnings acquired during the subsistence of the marital relationship shall be regarded as jointly owned property of the spouses. Applying this to virtual currencies, the classification logic is consistent with that of investment products such as stocks and funds, and can be divided into three scenarios:

1. Virtual currency acquired during marriage using marital joint property: Regardless of whose account the property is registered under, the property rights constitute marital joint property and are subject to division upon divorce; this applies when the purchase funds are derived from joint income such as wages and bonuses.
2. Those held before marriage but not increased after marriage: the virtual currency purchased and held before marriage belongs to the personal property of one party before marriage; the currency held before marriage naturally increases in value after marriage, which belongs to the natural appreciation of personal property and is generally not included in the common property; but if time and energy are invested in frequent trading operations (currency speculation) after marriage, the value-added part may be recognized as having business attributes and part of the common property.
3. The part of increasing the amount of joint funds after marriage: the share purchased by additional investment of joint funds after marriage and its appreciation belong to the common property; the part held before marriage and the part increased after marriage must be distinguished by the time point evidence, and those that cannot be distinguished shall be treated as mixed, and the party claiming personal attribute shall bear the burden of proof.

There is another kind of special reminder: during the marriage, one party uses virtual currency to "get rich". If the transaction is conducted through illegal platforms in China and is suspected of illegal financial activities, there are variables as to whether the relevant "income" can obtain complete protection in civil affairs. However, when the other party claims division, the court will still examine the existence and source of property rights and interests, instead of ignoring them all. The party that conceals assets or refuses to declare them may, pursuant to Article 1092 of the Civil Code, receive a smaller share or no share in the division of property.

3. Core of evidence presentation: Three sets of evidence confirm "acquired during marriage"

Virtual currency is highly concealed, lacking explicit registration like real-name property or bank accounts, making evidence collection the most significant challenge in divorce asset division. It is recommended to establish a chain of evidence around three sets of evidence:

1. Evidence of trading platform account: exchange account registration information, real-name authentication records, screenshots of account assets (including timestamps), and login device information, to prove that one party holds virtual currency and the quantity held.
2. Recharge flow and evidence of the source of funds: the recharge records of bank cards, Alipay and WeChat to the trading platform, which prove whether the purchase money comes from the common account or the personal account before marriage, and whether the recharge time is before marriage or within marriage.
3. On-chain address and timestamp evidence: Wallet addresses and on-chain transaction records can be cross-referenced with platform records to establish the key facts of “when the assets were acquired and how much was held.” When a platform account and an on-chain address corroborate each other, the court has the greatest certainty in determining assets acquired during marriage and their sources of funds.

The admissibility risk of electronic evidence cannot be ignored: according to the White Paper on Trial of Marriage and Family Cases (2019-2021) issued by Yinzhou Court, electronic evidence such as WeChat chat records and transfer screenshots has many defects and is difficult to admissibility-those saved only by screenshots may not be accepted due to the inability to verify the authenticity and the lack of the original carrier. It is recommended to notarize key electronic evidence in a timely manner or use a trusted time stamp to deposit the certificate, or apply to the court to obtain the back-office records of the trading platform (provided that the platform is within the territory or cooperates with the judiciary).

4. Division method: Why is discounted compensation more common than dividing the property into equal physical shares?

The physical characteristics of virtual currency determine that it is difficult to split it in half directly like deposits and real estate: first, the realization is limited, domestic compliance trading channels are limited, and forced selling may involve the risk of illegal financial activities; second, the price fluctuates violently, and the value difference between the split point and the delivery point may be huge; third, the account and key have personal specificity, and forced transfer has technical obstacles. Therefore, judicial practice adopts two kinds of treatment: first, negotiated discount compensation-after confirming the holding quantity, the holding party pays the other party the discount calculated according to the negotiated or reference market price, and the currency belongs to the holding party. The divorce agreement should clearly specify the currency, amount, holding address, and cash compensation value to avoid situations where assets are divided but remain unclear.

5. Analysis of Common Misconceptions

1. Myth 1: Bitcoin is not money and does not need to be divided in a divorce.Correct answer: Virtual currency, as a form of virtual property on the internet, is protected by law (Article 127 of the Civil Code). If acquired during marriage using marital joint property and confers property rights, it constitutes joint property and is subject to division upon divorce.
2. Myth 2: The cryptocurrency belongs to whoever holds it in their account.Correct answer: Account registration does not equate to ownership of the property; it depends on the time of acquisition and the source of funds. If cryptocurrency is purchased with joint funds and held in one party’s account, the corresponding rights and interests still belong to both parties jointly.
3. Myth 3: Coins purchased before marriage—any increase in value after marriage is considered personal property. Positive solution: the part that does not increase its holdings after marriage but only naturally increases in value belongs to the individual; the income generated by frequent trading operations after marriage may include business attributes, and some of them belong to the common; the part that increases its holdings with common funds after marriage is definitely common.
4. Misconception 4: If the other party denies owning any cryptocurrency, there’s nothing you can do. positive solution: the evidence chain can be formed through the platform's top-up flow, transfer records, chat records, on-chain addresses, etc.; if necessary, apply to the court to retrieve the platform records or conduct electronic evidence identification and notarization.

6. Special challenges in split execution and design of agreement clauses

The judgment and execution of virtual currency division can not get around the "delivery" problem: the transfer of encrypted currency depends on private key and on-chain transaction, and the court can not "put a seal" like the seizure of real estate ". In practice, one is to specify the delivery obligation-the currency, quantity and receiving address are specified in the judgment or mediation, and the currency holder will transfer the delivery within a time limit, and compensate at a discount according to the agreed market price within the time limit; The second is discount compensation-after confirming the holding quantity and the reference market price, the currency holder will pay the discount, and the currency will belong to the currency holder, thus avoiding the technical obstacles of forced transfer; third, the exploration of on-chain enforcement-some courts freeze accounts by issuing assistance enforcement notices to trading platforms, but offshore platforms and decentralized wallets are difficult to enforce, and ultimately still rely on the parties' good faith performance and breach of contract liability constraints. Therefore, clearly specifying the method and deadline for delivery, as well as the valuation calculation, in the divorce agreement is far more reliable than seeking enforcement afterward.

The proposal of the terms of the agreement contains five elements: currency and quantity (including the address on the chain or the account number of the platform); the determination method of the reference price (based on the average price of the public market on the agreement date or the delivery date); the amount of discount compensation and the payment node; the liability for late performance of the breach of contract (daily liquidated damages); A party conceals a remedy for undeclared virtual currency (which may be claimed separately after discovery and bear the resulting increased costs). For example, it may be agreed: "Both parties confirm that Party A holds about X BTC and about Y ETH (see the annex for the address). The above virtual currency rights and interests shall be partially divided during the marriage period. Party A shall pay a discount of XX yuan to Party B within 30 days after this Agreement comes into effect. If Party A conceals or transfers virtual currency, Party B may separately claim division according to law upon discovery, party A shall bear all the costs incurred and shall be reduced accordingly. Once the terms are implemented, even if one party later reneges, the other party can still enforce the agreement and pursue claims based on the transaction records.

7. National judicial tendencies and characteristics of trials in Ningbo

From the perspective of national judges, the divorce division of virtual currency has formed a relatively stable tendency: one is to recognize the property attribute and divisibility of virtual currency (Article 127 of the Civil Code), and the part acquired by common property within marriage is treated as common property; the other is to respect the negotiation of the parties, and the discount compensation takes precedence over the physical division; third, strict on concealment-Article 1092 of the Civil Code and the provisions of the Interpretation (II) on profligacy and transfer of common property are also applicable to virtual currency, and concealment may be less or not. Electronic evidence requires the preservation of the original storage medium or notarization; screenshots used in isolation have limited probative force. When litigating in Ningbo, parties should adopt the standard practice of securing evidence by combining the original data carrier with notarization or a timestamp, supplemented by cross-verification on the blockchain or through the platform.

There is also a practical problem in obtaining evidence that needs to be faced up to: if the trading platform is an overseas exchange, the channels for domestic courts to obtain background data are limited, and the proof is highly dependent on the parties' self-retention-registered mailbox, login equipment, currency withdrawal address, deposit and withdrawal bank records, and local cache of trading software may all be the sources of clues. For the party holding a large amount of virtual currency, voluntarily declare and submit a complete record of holding and source, which is not only a manifestation of fulfilling the obligation of husband and wife's property declaration, but also can avoid being presumed to be hidden because of "unclear source"; For the party who advocates division, the "platform clue + fund clue + chain clue" is put into a chain, even if the platform cannot adjust the certificate, the court can still form a heart evidence based on the flow of funds and the parties' interpretation.

8. Frequently Asked Questions

Is Bitcoin considered marital property in a divorce?

Virtual currency acquired during marriage using marital joint property is generally recognized as joint property and may be subject to division upon divorce; virtual currency held prior to marriage and not increased after marriage with marital funds is typically considered individual property, with any gains derived from post-marriage trading or management treated separately.

How to prove that the other party secretly holds virtual currency?

Provide transaction platform registration and recharge flow, bank transfer records, chat and holding clues (wallet address screenshots, discussion currency records) to form an evidence chain; key electronic evidence should be notarized or stored with a credible time stamp in time, and if necessary, apply to the court to retrieve platform data.

Can the virtual currency be split directly, half for each person?

Due to monetization constraints, platform restrictions, and significant price volatility, in practice, negotiated cash compensation or proportional sharing of monetization proceeds are commonly employed; physical division into equal halves is often difficult and gives rise to numerous disputes.

What are the consequences if one party conceals virtual currency and fails to declare it?

According to Article 1092 of the Civil Code, if the common property of the husband and wife is hidden or transferred, the division may be less or not divided; if it is found after divorce, the other party may sue for another division within the statutory limitation period.

When the value of virtual currency fluctuates greatly, what time point does the discount amount take?

In practice, the market price at the time point determined by both parties through negotiation is the main factor; if the negotiation fails, the court usually refers to the mainstream exchange market before the prosecution or the last reconciliation, and considers the currency, quantity and difficulty of realization. To avoid disputes, it is advisable to include in the agreement or mediation a pricing formula stipulating that “the closing price on a specified date on a designated platform shall prevail,” thereby locking in the volatility risk at the contractual level.

9. Lawyer's Practical Insights

If virtual currency is common property, don't rush to a conclusion. The key is two things: when you get it and where the money comes from. Assets acquired during marriage using marital property or obtained through mining are generally treated as marital property; assets acquired before marriage, or those explicitly purchased with personal funds, may retain their individual character. Another reality is that it is not legally recognized as a fiat currency, and its trading and liquidity are subject to restrictions. Therefore, even if it is classified as joint property, its actual division typically involves negotiated cash compensation rather than a straightforward “split the coins in half.” Understanding these two points, you will not have unrealistic expectations when negotiating.

Proof of this type of property poses the greatest challenge, as it is concealed within mobile phones and online platforms—visible yet intangible. It is recommended to fix three sets of materials as early as possible: the time of purchase or mining and the source of funds, including the transfer and exchange flow. The original storage medium of electronic data must be preserved; don’t just take screenshots. If you have access to account information, ensure that any evidence collection is lawful and compliant; do not cross legal boundaries in the process of gathering evidence. If the other party refuses to disclose such information, you may apply for an investigation during the litigation or require them to truthfully declare their assets.

In terms of the division method, a more practical approach is compensation at a discounted value: one party retains the property and pays the other party a cash equivalent, or the assets are jointly liquidated and then distributed.Don't just write "who owns Bitcoin" in the agreement, but specify the quantity, valuation method, base date, payment method and term, otherwise it would be a mine. Also be aware of policy and compliance risks, which may lead to other troubles if they involve large cashing or cross-border disposal. When negotiating the valuation caliber first, it is often more convenient than struggling with who holds it, and it also saves the regeneration of variables in the realization process.

The key to the characterization of Bitcoin is "time of acquisition and source of funds". Ningbo parties suggested that before the divorce, that is, fixed trading platform account screenshots, top-up water and holding time point evidence, if necessary, the key electronic evidence for notarization or credible time stamp deposit. Where large holdings are involved, the currency, quantity, address and discount compensation method shall be specified in the divorce agreement, and the "hidden property" shall be turned into "explicit agreement".