Extraterritorial Reach

Definition ∞ Extraterritorial reach describes the ability of a nation’s laws and regulations to apply to individuals or entities operating outside its geographical borders. This legal principle allows a country to assert jurisdiction over certain activities that have a significant impact within its territory. It is often invoked in areas such as financial crime, sanctions, and data privacy. The extent of this reach can be a source of international legal debate.
Context ∞ In the cryptocurrency domain, the extraterritorial reach of national regulations is a critical and complex issue. Governments, particularly the United States, often seek to apply their anti-money laundering (AML) and sanctions laws to global crypto exchanges and decentralized finance (DeFi) protocols. This creates regulatory uncertainty for international crypto businesses and users. News frequently reports on legal challenges and enforcement actions related to this jurisdictional assertion.