You're sending cryptocurrency from a wallet belonging to an individual physically present in country A to one belonging to an individual physically present in country B. It's not so much where the wallet is, obviously, but where the people using it are.

When I swipe my credit card at a store, I say "I spent money at the store", not "I transferred bits in a bank's datacenter somewhere"

Colloquially, when people talk about transfers of wealth, they talk in terms of the people who they belong to, not the literal physical manifestation of the transaction.

Fundamentally, law cares about the beneficiaries and intentions, especially as these pertain to rights and obligations. The mechanisms are a technical detail.

You don't even need a validator/node running in your country -- another standard node merely needs to hear about it, run the standard bitcoin-core code for tx propagation to its connected peers (happens automatically ofc.) and it will be included in the next block if network congestion conditions permit miners to do so.

Interestingly, this leads to a startling scenario if you use an 'advanced' client such as Electrum, where you have the ability to create & sign a valid transaction, before broadcasting it. During that time, which is ofc defined entirely by your decision to hold off broadcasting the TXO, the transaction 'exists' but isn't recorded in the blockchain. In fact anyone who can get ahold of that transaction data (not to be confused with your private key) can send it off to the network, and it will be registered in the next block. So a valid transaction, once signed by the corresponding private key, is almost entirely removed from the signor, and the decision to broadcast it can be viewed as a seperate one altogether from signing.

This is indeed fascinating, but is it unique to crypto? Seems like analyzing any electronic transfer like this would get you into a discussion of which bits are stored where on earth. If you're doing something which transfers value to a party under sanctions, and you're publicly announcing that as your intent, then I think courts are unlikely to be interested in metaphysical discussions like this.

Practically, no.

If I were committing, say, fraud, by sending an email from [email protected] to [email protected], with both me and the recipient being in the United States - even if the connection between the Google datacenters is physically routed through Canada, you'd have a hell of a time convincing a judge and jury that I'm committing international fraud.

The owner of the wallet is what's important, not the implementation detail. The legal system cares a great deal about intent, because it isn't interested in playing rules-lawyer with wise-asses.

You're probably reading too deeply into it. Remember, North Korea is mostly firewalled off from the worldwide Internet, so that's most likely where the problem begins.

In order for crypto to exist, it has to be on the global Blockchain. There is no isolation via firewall possible.

The Blockchain isn't just some magical thing that exists. If you can't access the global Internet, you can't access the Blockchain.

The same argument was trotted out when evaluating (in the early days of the web) a crime had committed if 'the internet' had been involved because the internet was global. But that didn't hold any water and I don't think in a world defined by 'endpoints' it is going to matter much here. Who verifies a transaction isn't relevant, who is the ultimate beneficiary and who is the sender are the relevant bits.

Where ever the private keys reside is where the crypto resides. It's pretty simple.

Cool, what jurisdiction is it in when it is a copy of a key in 140 countries? All? None? First to find? It’s anything but simple when it comes to this space.