Privacy and accountability are widely believed to be opposing goals in identity systems. On one hand, service providers require users to be identifiable to reduce fraud; on the other, users want to limit tracking while minimizing the amount of information disclosed about them. As a result, debates on identity become a rope pulling effort with privacy proponents on one end and security ones on the other. We will illustrate that this opposition is in fact an illusion.

Modern cryptography makes it possible to achieve both strong security and privacy to any degree desired. In this paper, we present a system allowing honest users to access online resources anonymously, but when a user contravenes to the terms of service or acts fraudulently, an auditor can de-anonymize and then ban the misbehaving user from the system. We also describe a prototype using a mobile phone as a second factor of authentication implementing this system.

This paper showcases a new ID escrow system to verifiably encrypt user pseudonyms for an auditor, and an efficient revocation accumulator scheme compatible with the U-Prove technology.