Pisces: Private and Compliable Cryptocurrency Exchange

Ya-Nan Li

Network and Distributed System Security (NDSS) Symposium 2024 · Day 1 · Crypto Protocols

"Pisces: Private and Compliable Cryptocurrency Exchange" introduces a groundbreaking system designed to address a critical privacy vulnerability inherent in modern centralized cryptocurrency exchanges. Given by Ya-Nan Li at the NDSS Symposium, this talk highlights how the combination of transparent public blockchains and **Know Your Customer (KYC)** requirements on centralized platforms like Coinbase leads to a significant privacy erosion. When users withdraw cryptocurrencies to their external on-chain wallets, exchanges, already possessing sensitive real-world identity and bank information, can link this data to all subsequent on-chain transactions. This effectively negates the pseudonymity often associated with blockchain technology, allowing platforms to build extensive profiles of users' external financial activities—for instance, deducing a car purchase from a Bitcoin withdrawal followed by a transfer to a car manufacturer's address.