SCCT-DARS: Secure and Compliant Cryptocurrency Transactions in a Decentralized Anonymous Regulated System

The Decentralized Anonymous Payment System (DAP) is considered to be one of the most successful and widely adopted blockchain applications. In spite of the high level of anonymity and security offered by these payment systems (DAP), their potential use for illicit activities can pose a threat to national security due to the inability to identify those involved or stop transactions. In this paper, we introduce Secure and Compliant Cryptocurrency Transactions in a Decentralized Anonymous Regulated System (SCCT-DARS), which aims to assure fulfillment of government regulations and supervision whereas preserving the confidentiality of transactions and the identities of transaction participants. The primary aspect of the suggested proposal is the utilization of the RSA accumulator in conjunction with the Schnorr protocol. This combination enables compliance with government regulations and provides a revocation mechanism in the event of regulation violations. Furthermore, to ensure transaction privacy and anonymity, our proposed system utilizes a combination of ring signatures, stealth addresses, and Pedersen commitments. Regarding security, our proposed protocol conforms to the existing state-of-the-art security requirements and achieves complete anonymity. In addition, the performance analysis demonstrates that our suggested protocol is still applicable and effective despite achieving complete anonymity.