The divorce dragged on for eight years, almost as long as the marriage. The wealthy San Francisco couple sparred over child support, the profits from the sale of the husband’s software company and the fate of their $3.6 million home.
But the most consequential court battle between Erica and Francis deSouza concerned a bitter dispute over millions of dollars in missing Bitcoin.
Francis DeSouza, a tech executive, had bought a little more than 1,000 Bitcoins before he separated from his wife in 2013 and then lost nearly half the funds when a prominent cryptocurrency exchange collapsed. After three years of litigation, a San Francisco appeals court ruled in 2020 that he had failed to properly disclose some elements of his cryptocurrency investments, which had exploded in value. The court ordered him to give Erica deSouza more than $6 million of his remaining Bitcoin.
In legal circles, the deSouzas’ case has become known as perhaps the first major Bitcoin divorce. Such marital disputes are increasingly common. As cryptocurrencies gain wider acceptance, the division of the family stash has turned into a major source of contention, with estranged couples trading accusations of deception and financial mismanagement.
An ugly divorce tends to generate arguments about virtually everything. But the difficulty of tracking and valuing cryptocurrency, a digital asset traded on a decentralized network, is creating new headaches. In many cases, divorce lawyers said, spouses underreport their holdings or try to hide funds in online wallets that can be difficult to get into.
