Security Threats in Electronic Currency Exchange Protocols

Abstract

In this paper will be presented secure protocol improvement to the known David Chaum anonymous
currency exchange procedure. We show its vulnerability to possible frauds after a digital coin is spent
several times. In such case, the system cannot successfully determine how many times the coin was
spent and how many times the seller may faked the transaction. Finally in such attack the bank is not
able to charge the real abuser. This limitation leads to the conclusion that the original system cannot
be securely used for irreversible off-line transactions. In this paper we try to solve this problem and
propose an improved method which allows this vulnerability to be overcome.