1. Privacy-preserving
KYC on Ethereum
Biryukov,
Khovratovich,
Tikhomirov
Introduction
A decentralized
KYC-compliant
identity
Conclusion and
future work
1/20
Privacy-preserving KYC on Ethereum
Alex Biryukov, Dmitry Khovratovich, Sergei Tikhomirov
SnT, University of Luxembourg
9 May 2018
CWI, Amsterdam, The Netherlands

2. Privacy-preserving
KYC on Ethereum
Biryukov,
Khovratovich,
Tikhomirov
Introduction
A decentralized
KYC-compliant
identity
Conclusion and
future work
2/20
Outline
Introduction
A decentralized KYC-compliant identity
Conclusion and future work

3. Privacy-preserving
KYC on Ethereum
Biryukov,
Khovratovich,
Tikhomirov
Introduction
A decentralized
KYC-compliant
identity
Conclusion and
future work
3/20
Identity is data that represents a user
Identity is used for:
Authentication: proves the user is who they claim to be;
Authorization: ensure the user is eligible for an action.
In cryptographic terms, user is represented by a
private-public key pair.

4. Privacy-preserving
KYC on Ethereum
Biryukov,
Khovratovich,
Tikhomirov
Introduction
A decentralized
KYC-compliant
identity
Conclusion and
future work
4/20
Centrally managed identity
Prevalent model today
User delegate identity management to companies, get
access using password
Risks: identity theft, central point of failure

5. Privacy-preserving
KYC on Ethereum
Biryukov,
Khovratovich,
Tikhomirov
Introduction
A decentralized
KYC-compliant
identity
Conclusion and
future work
5/20
Decentralized identity
Putting users in charge of managing their data
Can be implemented using blockchains
Does it respect privacy?
Does it comply with regulations?

6. Privacy-preserving
KYC on Ethereum
Biryukov,
Khovratovich,
Tikhomirov
Introduction
A decentralized
KYC-compliant
identity
Conclusion and
future work
6/20
Bitcoin
A decentralized digital currency [Nakamoto 2008]
Combines cryptography and economics to prevent
double spending without a trusted third party

7. Privacy-preserving
KYC on Ethereum
Biryukov,
Khovratovich,
Tikhomirov
Introduction
A decentralized
KYC-compliant
identity
Conclusion and
future work
7/20
Ethereum: generalized blockchain
A blockchain-based application platform [Buterin 2014]
Key feature: Turing complete programming

8. Privacy-preserving
KYC on Ethereum
Biryukov,
Khovratovich,
Tikhomirov
Introduction
A decentralized
KYC-compliant
identity
Conclusion and
future work
8/20
Ethereum tokens
A popular use case for smart contracts
A fungible unit of value maintained by a smart contract
ERC20 is the de-facto standard token API
Decentralized exchanges – a promising direction

9. Privacy-preserving
KYC on Ethereum
Biryukov,
Khovratovich,
Tikhomirov
Introduction
A decentralized
KYC-compliant
identity
Conclusion and
future work
9/20
ERC20 functions
transfer – send tokens to an address
approve – allow other user to transfer my tokens
transferFrom – send other user’s tokens
(only if approved)

10. Privacy-preserving
KYC on Ethereum
Biryukov,
Khovratovich,
Tikhomirov
Introduction
A decentralized
KYC-compliant
identity
Conclusion and
future work
10/20
A decentralized KYC-compliant identity
Our identity management design for financial services is:
Decentralized (on-chain)
Privacy-preserving
Can be made compliant
Extendable to many application types (consider a token
exchange as an example)

11. Privacy-preserving
KYC on Ethereum
Biryukov,
Khovratovich,
Tikhomirov
Introduction
A decentralized
KYC-compliant
identity
Conclusion and
future work
11/20
Cryptographic accumulator
A cryptographic primitive: absorbs algebraic objects
Provides interface to verify whether a value was
accumulated
Preserves privacy: individual values are not disclosed

12. Privacy-preserving
KYC on Ethereum
Biryukov,
Khovratovich,
Tikhomirov
Introduction
A decentralized
KYC-compliant
identity
Conclusion and
future work
12/20
Accumulator-based identity workflow (1/2)
A KYC Provider publishes a contract with an empty
accumulator
A User interacts with the Provider (possibly offline)
and gets their value accumulated
The Provider issues a witness s.t. the User can later
prove their eligibility

13. Privacy-preserving
KYC on Ethereum
Biryukov,
Khovratovich,
Tikhomirov
Introduction
A decentralized
KYC-compliant
identity
Conclusion and
future work
13/20
Accumulator-based identity workflow (2/2)
To prove eligibility, a user submits an (atomic)
zero-knowledge proof of the statement:
I know the private key corresponding to msg.sender;
I know a signature and a witness for some value which
was previously accumulated.

14. Privacy-preserving
KYC on Ethereum
Biryukov,
Khovratovich,
Tikhomirov
Introduction
A decentralized
KYC-compliant
identity
Conclusion and
future work
14/20
KYC Provider interface
add(user, token) – makes user eligible
remove(user, token) – makes user not eligible
isEligible(user, token) – check if the user is
eligible

15. Privacy-preserving
KYC on Ethereum
Biryukov,
Khovratovich,
Tikhomirov
Introduction
A decentralized
KYC-compliant
identity
Conclusion and
future work
15/20
Use case 1: compliant exchange
An exchange verifies users before making transactions
Traded tokens do not need to be aware of KYC

16. Privacy-preserving
KYC on Ethereum
Biryukov,
Khovratovich,
Tikhomirov
Introduction
A decentralized
KYC-compliant
identity
Conclusion and
future work
16/20
Use case 2: compliant token
A token verifies users before making transactions
Services (exchanges) do not need to be aware of KYC

17. Privacy-preserving
KYC on Ethereum
Biryukov,
Khovratovich,
Tikhomirov
Introduction
A decentralized
KYC-compliant
identity
Conclusion and
future work
17/20
Implementation details
A PoC implementation (not privacy-preserving): joint
1st prize at the Luxblock hackathon in May 2017
(The team also included: Daniel Feher, Dmitry
Khovratovich, Aleksei Udovenko, Maciej Zurad)
Accumulator implementation depends on new opcodes:
currently Ethereum does not natively support all
required cryptographic operations
Updating the accumulator is expensive if done on-chain

18. Privacy-preserving
KYC on Ethereum
Biryukov,
Khovratovich,
Tikhomirov
Introduction
A decentralized
KYC-compliant
identity
Conclusion and
future work
18/20
Conclusion and future work
Ethereum provides ways to encode and enforce digital
agreements
Cryptography allows for additional eligibility checks
which minimally impact the users’ privacy
Many technical challenges to overcome before realizing
this idea

19. Privacy-preserving
KYC on Ethereum
Biryukov,
Khovratovich,
Tikhomirov
Introduction
A decentralized
KYC-compliant
identity
Conclusion and
future work
19/20
Research question
Can we leverage sophisticated cryptography in
public blockchains to provide stronger security
and privacy guarantees?

20. Privacy-preserving
KYC on Ethereum
Biryukov,
Khovratovich,
Tikhomirov
Introduction
A decentralized
KYC-compliant
identity
Conclusion and
future work
20/20
Questions?
cryptolux.org
s-tikhomirov.github.io