Marking: A Privacy Protecting Approach Against Blackmailing

[lcs Mixmaster Remailer]

http://www.informatik.tu-darmstadt.de/GK/participants/kuegler/pkc01_marking.ps:

Marking: A Privacy Protecting Approach Against Blackmailing

Dennis Kuegler and Holger Vogt

Blind signature based anonymous payment systems [Cha83] have been
invented for privacy protecting payments over the internet. However,
it was discovered by von Solms and Naccache [vSN92] that unconditional
anonymity may be misused by criminals: A blackmailer can exploit the
properties of the used blind signature to receive blackmailed money from
his victim so that neither the victim nor the bank are able to recognize
the blackmailed coins later. Furthermore, the blackmailed coins can be
transferred anonymously via an unobservable broadcast channel (e.g. a
newsgroup). This attack is called the perfect crime, as it is impossible
to identify or trace the blackmailer.

To solve anonymity related problems as blackmailing, money laundering,
or illegal purchases, payment systems with revokable anonymity have been
proposed [CMS96, JY96, FTY96, JY97]. In these payment systems trusted
third parties are able to revoke the anonymity of the users at any time.

In our opinion blackmailing is the most serious drawback of the known
payment systems offering unconditional anonymity. Attacks like money
laundering and illegal purchases aren't a major problem in anonymous
electronic payment systems, as these problems are even worse with
physical cash [Fro96], because in anonymous electronic payment systems
the bank always knows how much a customer withdraws and how much a person
deposits. Thus the bank is able to detect either the initiator or the
recipient of a suspicious transaction.

In this paper we will show how to fight blackmailing without
restricting the anonymity of users as it is done in systems with
revokable anonymity. We present a new online payment scheme, which offers
unconditional anonymity, but does not suffer from the blackmailing attack
described above.