One thing to keep in mind is that Ethereum is nothing but a network of computers passing messages to each other. Those messages are considered speech from a Constitutional perspective. Same as you sending a text message to your friend. Therefore normal free speech protections almost certainly apply, and most relevantly the Brandenburg test for imminent lawless action.
Suppose Tony texts Paulie and tells him to wack a guy. That's illegal, unprotected speech, because it directly leads to imminent lawless action. Similarly the wallet owner who signs and broadcasts an Ethereum transaction to send money to North Korea would bass the Brandenburg test because it obviously leads to imminent lawless action.
The validator who builds the block that includes an illegal transaction is an interesting question. On the one hand by building the block, one could argue that they're instrumental in putting carrying out the illegal transaction. OTOH one might argue that if the transaction is in the network (and priced appropriately) it almost certainly will get included on-chain eventually. Therefore the validator might argue that it's activity doesn't create any imminent lawless activity, because the transaction being in the mempool is already fait accompli. The validator is more like the reporter writing about a crime in the newspaper.
But what I'm nearly certain of is that building on top of a chain with a previously finalized illegal transaction is okay. It's certainly not illegal to talk about a crime that's already happened. The further a block gets away from the initial block, then the less imminent the illegal action becomes. SCOTUS has historically held a very high standard for Brandenburg, which is why it's not even illegal to advocate for genocide or the violent overthrow of the American government.
Suppose Tony texts Paulie and tells him to wack a guy. That's illegal, unprotected speech, because it directly leads to imminent lawless action. Similarly the wallet owner who signs and broadcasts an Ethereum transaction to send money to North Korea would bass the Brandenburg test because it obviously leads to imminent lawless action.
The validator who builds the block that includes an illegal transaction is an interesting question. On the one hand by building the block, one could argue that they're instrumental in putting carrying out the illegal transaction. OTOH one might argue that if the transaction is in the network (and priced appropriately) it almost certainly will get included on-chain eventually. Therefore the validator might argue that it's activity doesn't create any imminent lawless activity, because the transaction being in the mempool is already fait accompli. The validator is more like the reporter writing about a crime in the newspaper.
But what I'm nearly certain of is that building on top of a chain with a previously finalized illegal transaction is okay. It's certainly not illegal to talk about a crime that's already happened. The further a block gets away from the initial block, then the less imminent the illegal action becomes. SCOTUS has historically held a very high standard for Brandenburg, which is why it's not even illegal to advocate for genocide or the violent overthrow of the American government.