BTC_Bear is right. If done properly, any copies that any intermediaries made would simply be of encrypted gibberish. Only A and Z could spend from the wallet. The B-Y handlers would only have an encrypted form of the wallet
make all the copies you want, they would be useless without the private key that Z possesses and which is needed to decrypt the wallet.
LOLZ. That is the solution?
Um how does "B" make sure the wallet is valid if it is encrypted? Trust the criminal counterpart with $1M in product? So "B" (or any number of intermediaries) hand "Z" a wallet and ... oops turns out it is encrypted garbage. Guess "A" just stole $1M.
Now lets say it is valid. That does nothing to address the fact that "A" could simply steal from "Z" at will any time in the future until the funds are moved.
Now lets pretend A is honest.
What does "Z" do w/ this encrypted wallet when he needs to spend it? Sell it to a new party? Then Mr. "New Party" has to trust not just Z but also A (and maybe A did the same thing so he is trusting people he doesn't even know).
Once again there is a reason why we hash tx into blocks. People are afraid to sell a 1 BTC steam game on a 0-confirm tx but somehow think criminals will trust counterparts they know are criminals with multi-million dollar drug tx and keep them 0-confirm not for 10 minutes but to hours, weeks, or even years? LOLZ.
If you can trust your counterparty to never cheat you then you don't need a blockchain to begin with. Without the blockchain to enforce irreversibility it is simply an IOU.B to Y could verify the amount the whole way with out spending. I'll let you figure out how. It is quite simple actually.
Casacius Coins and Bitbills are out of business then. And they are 'legitimate' businesses without the threat of 'if you screw me over, it's the fishes for you'.
But it is OK, It can't be done. You're right.
psy: Do you know something I don't?
Please share.
Sometimes the treasure you find is just what was left for you to keep you from digging deeper. 
