Marriage of DeSouzaAnnotate this Case
Erica served Francis with a petition for dissolution of marriage, along with an automatic temporary restraining order that prohibited him from “[t]ransferring, encumbering, hypothecating, concealing, or in any way disposing of any property ... without the written consent of the other party or an order of the court, except in the usual course of business or for the necessities of life.” Francis subsequently initiated three bitcoin-related transactions, involving $45,000, $99,451, and $44,940. One account holder lost hundreds of thousands of bitcoins to hacking and embezzlement. Francis knew of the company’s bankruptcy but did not recover the bitcoins or his investment. Francis filed his preliminary schedule of assets, disclosing ownership of 1,062.21 bitcoins. Erica sought her half of the community bitcoins. Francis then disclosed that some were tied up in the bankruptcy so that he possessed only 613.53 of the 1062.21 community bitcoins.
The court ordered Francis to transfer to Erica half of the bitcoins he had in his possession, to show cause why he should not be ordered to transfer an additional 224.34 bitcoins and proportional cryptocurrency, and to pay Erica’s attorney’s fees and costs. The court found that Francis had violated the automatic restraining order and his fiduciary duties and that he affirmatively hid information. The court of appeal affirmed, rejecting Francis’s argument that the information he withheld was not material and, alternatively, there was no substantial evidence his breach impaired Erica’s interest in their community estate.