Handcuffing Big Brother: an Abuse-Resilient Transaction Escrow Scheme

Abstract

We propose a practical abuse-resilient transaction escrow scheme with applications to privacy-preserving audit and monitoring of electronic transactions. Our scheme ensures correctness of escrows as long as at least one of the participating parties is honest, and it ensures privacy and anonymity of transactions even if the escrow agent is corrupt or malicious. The escrowed information is secret and anonymous, but the escrow agent can efficiently find transactions involving some user in response to a subpoena or a search warrant. Moreover, for applications such as abuse-resilient monitoring of unusually high levels of certain transactions, the escrow agent can identify escrows with particular common characteristics and automatically (i.e., without a subpoena) open them once their number has reached a pre-specified threshold.

Our solution for transaction escrow is based on the use of Verifiable Random Functions. We show that by tagging the entries in the escrow database using VRFs indexed by users’ private keys, we can protect users’ anonymity while enabling efficient and, optionally, automatic de-escrow of these entries. We give a practical instantiation of a transaction escrow scheme utilizing a simple and efficient VRF family secure under the DDH assumption in the Random Oracle Model.