Hi!
If you are tracing the code with some kind of debugger rather than disassembly the binary image, does it matter if the image is encrypted ?
I guess it depends on why it is encrypted, and why you are tracing it. Encryption for copy protection, and access protection (ie movies and e-books), is covered by the DMCA.
While talking about the DMCA. If you violate the DMCA outside the US and this violation for whatever reason hurts the US interests, you can be prosecuted in the US whenever you enter US teritory. And it is a criminal offense too. So you might end up in jail when you are prosecuted.
Groetjes, Peter Busser