# The Wallets Behind the Divorce — Classification, Calculation, and Discovery Plan

## 1. The commingled pool: separate and marital proportions

| Source | Units | Share of pool |
|---|---|---|
| Premarital BTC (traced by complete exchange records) | 8 BTC | 8/12 = **66.67% separate** |
| BTC bought with $120,000 from the joint account | 4 BTC | 4/12 = **33.33% marital** |
| Combined wallet | 12 BTC | 100% |

The 8 BTC are separate under Rule 1 because complete exchange records trace premarital ownership. The 4 BTC purchased with joint-account funds during marriage are marital under Rule 2 — the source of funds, not the timing of the wallet consolidation, controls. Commingling does **not** destroy Evan's separate claim (Rule 2), but because no unit-specific identifiers survive, Rule 3 fixes the character of every later withdrawal and every remaining unit at the pool ratio: **2/3 separate, 1/3 marital.**

## 2. The 3-BTC sale and the remaining 9 BTC

The sale is not "first-in, first-out" and Evan cannot elect which coins he sold; Rule 3 applies the pool ratio:

- **3 BTC sold** = 2 BTC separate (66.67%) + 1 BTC marital (33.33%)
- **9 BTC remaining** = 6 BTC separate + 3 BTC marital

Proceeds went to joint checking and were consumed on ordinary household expenses. Under Rule 6, **neither spouse is reimbursed** — no credit to Evan for the separate two-thirds, and no claim by Mira for the marital one-third. That money is simply out of the estate. The surviving 9 BTC continue to carry the identical 2/3–1/3 ratio.

## 3. The 6-BTC exchange into 90 ether

Under Rule 4, an asset-to-asset exchange does not change character; the new asset inherits the proportional character of what was surrendered.

- 6 BTC surrendered = 4 BTC separate + 2 BTC marital (2/3–1/3)
- **90 ETH received = 66.67% separate (60 ETH) + 33.33% marital (30 ETH)**
- **3 BTC retained = 2 BTC separate + 1 BTC marital**

The later transfer of 30 of the 90 ETH to a cold wallet is legally irrelevant to character. A change of custody is not a change of ownership; because both wallets are now identified, the traced pool remains 3 BTC + 90 ETH, each still 2/3 separate and 1/3 marital. Appreciation or depreciation rides on those same fractions (Rule 5) — no separately compensable contribution has been supplied that would justify a different allocation of gain.

## 4. Valuation-date values of the known holdings

| Asset | Units | Value | Separate (66.67%) | Marital (33.33%) |
|---|---|---|---|---|
| Bitcoin @ $50,000 | 3 | $150,000 | $100,000 (2 BTC) | $50,000 (1 BTC) |
| Ether @ $3,000 | 90 | $270,000 | $180,000 (60 ETH) | $90,000 (30 ETH) |
| **Known totals** | — | **$420,000** | **$280,000** | **$140,000** |

## 5. Mira's one-half share of known marital crypto

Known marital value $140,000 × ½ = **$70,000 to Mira** (Rule 8), with the remaining $70,000 marital share plus the $280,000 separate share to Evan.

Note the arithmetic point worth making at trial: the marital estate contributed $120,000 of cash and its traced share is now worth $140,000 in surviving assets *after* absorbing one-third of a 3-BTC sale that was consumed. Marital appreciation is real and must not be characterized as Evan's "premarital growth."

## 6. Provisional classification of the second 40-ether wallet

**Presumptively 100% marital — $120,000.** Under Rule 7, property found in an undisclosed wallet during marriage is presumptively marital, and the burden is on Evan to trace a separate source. The tax records establish only that the 40 ETH arrived *during marriage from an external address*, which triggers the marital presumption under Rule 1 as well.

Evan's gift defense currently fails on both required elements of Rule 7:
- **Donor intent** — no gift letter, no message, no brother testimony, no declaration.
- **Transaction source** — no donor wallet records, no exchange statement showing the brother's acquisition or transfer.

An uncorroborated self-serving statement by the concealing spouse is not tracing evidence. Rule 10 forbids assuming the source; the classification stays marital unless and until Evan produces proof. His "too technical to trace" assertion is legally and factually empty — blockchain transfers are the most traceable asset class in the case, and the argument should itself be offered as evidence of bad faith.

## 7. Mira's share plus possible concealment surcharge

If the wallet is marital and the omission from the sworn disclosure was intentional (Rule 9):

| Component | Calculation | To Mira |
|---|---|---|
| Half of known marital crypto | $140,000 × ½ | $70,000 |
| Half of concealed wallet | $120,000 × ½ | $60,000 |
| Concealment surcharge | $120,000 × 20% | $24,000 |
| **Total** | | **$154,000** |

Evan retains $280,000 separate + $70,000 marital + $60,000 − $24,000 = **$386,000**. Cross-check: $154,000 + $386,000 = $540,000 = total estate ($420,000 known + $120,000 concealed). ✔

Outcome range to brief for the client:
- **Floor (Evan proves a valid gift):** $70,000
- **Mid (wallet marital, concealment found merely negligent):** $130,000
- **Ceiling (wallet marital + intentional concealment):** $154,000

## 8. Evidence still required before final settlement

**Exchange records**
- Complete KYC account lists and full-history CSV/API exports from every centralized exchange Evan used (including the platform that executed the 3-BTC sale and the 6-BTC→90-ETH swap), covering the premarital period through the valuation date.
- Trade confirmations, order IDs, and settlement statements for the original 8-BTC acquisition, the $120,000 purchase of 4 BTC, the 3-BTC sale, and the ETH swap — plus DEX router/contract records if the swap was on-chain.
- Fiat rails: joint-account statements confirming the $120,000 out and the 3-BTC proceeds in, and confirmation those proceeds were spent on household items (which forecloses any reimbursement claim under Rule 6).

**Wallet records**
- All wallet addresses, extended public keys (xpubs), and derivation paths for the original wallet, the cold wallet, and the undisclosed wallet — sworn and complete, with an affirmative statement of no other addresses.
- Full transaction hashes for every inbound and outbound transfer, so the 30-ETH cold-wallet move and any staking, lending, wrapping, bridging, NFT, or airdrop activity can be reconciled.
- Device/seed-phrase custody information and hardware wallet inventory; independent blockchain-analytics clustering to detect additional addresses controlled by Evan.

**Donor / gift evidence for the 40 ETH**
- The brother's sending wallet address and its full transaction history; proof of how the brother acquired the 40 ETH (his own exchange statements).
- Contemporaneous gift documentation: gift letter, texts/emails/chat logs, any IRS Form 709 or foreign gift reporting.
- Deposition of the brother and requests to admit; Evan's deposition on the source, timing, and consideration for the transfer.
- Evidence excluding the alternatives: that it was not marital funds routed through the brother, not compensation for services rendered during marriage, and not Evan's own coin moved between his own wallets.

**Procedural steps**
- Litigation-hold and preservation letter (crypto is trivially movable); subpoenas to exchanges under Rule 10; a **targeted forensic tracing order** with a court-appointed or agreed blockchain examiner; consider an injunction against transfers and, if warranted, a motion for sanctions and fees for the false sworn disclosure.

## 9. Recommendation on the $50,000 offer

**Reject it.** The offer is below even the undisputed floor: Mira's half of the *known* marital crypto alone is $70,000, and that figure assumes Evan wins his separate-property tracing entirely. Measured against the realistic ceiling of $154,000, the proposal captures roughly one-third of her likely award and would release the very claim — the concealed wallet — that carries the surcharge. Accepting it would also reward a false sworn disclosure and waive the Rule 9 remedy.

**Do not settle unconditionally.** The correct sequence is:

1. **Serve preservation and discovery immediately** and move for the targeted forensic order under Rule 10. Do not assume the 40 ETH's source in either direction — assumption is exactly what the rule forbids, and here the presumption already favors Mira.
2. **Take the $70,000 known-marital component off the table** by stipulation or partial order if Evan will agree, expressly reserving all claims to the second wallet, the surcharge, fees, and any additional wallets discovery reveals.
3. **If a settlement is desired**, structure it conditionally: a floor of $70,000 plus (a) a defined payment for the second wallet, (b) a sworn, comprehensive wallet-and-address disclosure with an affirmation of completeness, (c) a reopener/clawback clause awarding Mira 100% of any later-discovered undisclosed asset, and (d) in-kind transfer or escrow of specified coin rather than an unsecured promise, given the ease of dissipation.
4. **Reserve fees and sanctions.** Evan's tracing burden on the gift claim and his own concealment — not Mira's budget — should drive the cost of the forensic work.

**Bottom line:** Separate $280,000 / marital $140,000 on the traced holdings; Mira's baseline $70,000; the 40 ETH is presumptively marital, raising her claim to $130,000, and to **$154,000** with the 20 percent concealment surcharge. Seek forensic discovery before any final division.