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PET-Exchange: A Privacy Enhanced Trading Exchange using Homomorphic Encryption
Linköping University, Department of Computer and Information Science, Database and information techniques. Linköping University, Faculty of Science & Engineering. Sectra Commun, Linkoping, Sweden.
Linköping University. Nasdaq Inc, Linkoping, Sweden.
Linköping University, Department of Computer and Information Science, Database and information techniques. Linköping University, Faculty of Science & Engineering.ORCID iD: 0000-0003-1367-1594
2023 (English)In: 2023 20TH ANNUAL INTERNATIONAL CONFERENCE ON PRIVACY, SECURITY AND TRUST, PST, IEEE , 2023, p. 168-179Conference paper, Published paper (Refereed)
Abstract [en]

The underlying trading mechanisms of electronic securities exchanges have mostly stayed the same over the years with some additions and improvements. However, over the recent decade, high-frequency traders using algorithmic trading have shifted the field using practices that many consider unfair or unethical. In addition, insider trading continues to cause trust issues on certain trading platforms. In this paper, we present PET-Exchange, a privacy-preserving framework for trading securities on an electronic stock exchange. By using homomorphic encryption, PET-Exchange prevents information disclosures and unfair advantages in the trading processes. By matching and trading encrypted orders, we study the performance under various volumes and timing constraints, and compare this to the unencrypted counterparts. Our analysis of PET-Exchange using market trade data shows the privacy and cryptographic tradeoffs, demonstrating it to be suitable for small-scale trading and privacy-preserving auctions. Finally, we discuss the potential impact on transparency, fairness, and opportunities for financial crime in an electronic securities exchange. The insights we provide take us one step closer to a privacy-aware and fair public securities exchange.

Place, publisher, year, edition, pages
IEEE , 2023. p. 168-179
Series
Annual Conference on Privacy Security and Trust-PST, ISSN 1712-364X
National Category
Other Computer and Information Science
Identifiers
URN: urn:nbn:se:liu:diva-200109DOI: 10.1109/PST58708.2023.10320190ISI: 001108746000021ISBN: 9798350313871 (electronic)ISBN: 9798350313888 (print)OAI: oai:DiVA.org:liu-200109DiVA, id: diva2:1827836
Conference
20th Annual International Conference on Privacy, Security and Trust (PST), Copenhagen, DENMARK, aug 21-23, 2023
Note

Funding Agencies|Wallenberg AI, Autonomous Systems and Software Program (WASP) - Knut and Alice Wallenberg Foundation

Available from: 2024-01-15 Created: 2024-01-15 Last updated: 2025-09-01
In thesis
1. Toward Secure and Privacy-Preserving Communication over Non-Trusted Networks
Open this publication in new window or tab >>Toward Secure and Privacy-Preserving Communication over Non-Trusted Networks
2025 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

The widespread adoption of encrypted communication protocols has improved digital privacy. However, even if the content is encrypted, an attacker can exploit metadata and patterns in network traffic to infer a user’s activity and behavior. Meanwhile, as users increasingly rely on third-party infrastructure, cloud-based applications face privacy challenges during data processing, exposing sensitive information. In parallel, long-term communication security depends on proper certificate management, where misconfigurations or evolving practices can compromise security. This thesis explores these multifaceted challenges and presents solutions to preserve privacy in adversarial and non-trusted environments.

First, the thesis focuses on encrypted traffic analysis, particularly fingerprinting at-tacks that exploit observable metadata such as packet sizes, transmission timing, and traffic flow patterns to infer sensitive user information and identify user activities. The work explores these attacks across multiple platforms and use cases, demonstrating their real-world feasibility and high accuracy. To counteract these threats, several mitigation strategies are systematically evaluated, including packet padding, timing obfuscation, and traffic shaping, each assessed for its tradeoffs between effectiveness, impact on network performance, and users’ quality of experience.

Second, the thesis studies secure data computation in cloud environments using homomorphic encryption (HE), a cryptographic technique that enables computation directly on encrypted data without requiring prior decryption. While HE offers a strong theoretical foundation, its practical application has long been hindered by performance overhead and integration complexity. This thesis explores the real-world applicability of HE by designing diverse systems, comparing schemes, and proposing efficiency optimizations. The findings highlight the potential and current limitations of HE, offering valuable guidance for its adoption in cloud-based systems.

Third, the thesis examines long-term authentication security through a 10-year longitudinal analysis of certificate usage in the web public key infrastructure. While certificates are essential for encrypted communication, inconsistent issuance, renewal, and management can introduce systemic vulnerabilities. The analysis of wildcard and multi-domain certificates, as well as certificate chain evolution, reveals key trends, including declining use of wildcard certificates, shifting practices among certificate authorities, and simpler chain structures. These patterns highlight evolving industry behaviors and persistent challenges in certificate lifecycle management.

Combined, this thesis contributes to a better understanding of the evolving security and privacy landscape in digitally connected systems. By contributing to three distinct but interrelated domains, the thesis highlights the complexity of modern privacy challenges and offers targeted strategies to strengthen digital confidentiality. Through systematic evaluations, novel designs, and long-term measurements, the work advances state-of-the-art privacy-preserving communication and provides practical insights for building a more resilient and trustworthy digital infrastructure.

Abstract [sv]

I dagens digitala värld används kryptering i allt större utsträckning för att skydda vår kommunikation och stärka den digitala integriteten. Men även om innehållet är krypterat kan en angripare utnyttja metadata och mönster i nätverkstrafik för att dra slutsatser om en användares aktivitet och beteenden. Samtidigt har användningen av molntjänster ökat kraftigt, vilket ställer höga krav på att databehandlingen sker på säkert sätt då känslig information ofta behandlas på tredjepartsinfrastruktur. Dessutom är långsiktig säkerhet i digital kommunikation beroende av korrekt hantering av digitala certifikat, där felkonfigurationer eller föråldrade metoder kan skapa säkerhetsluckor. Den här avhandlingen undersöker dessa komplexa och sam-manlänkade utmaningar samt presenterar lösningar för att skydda integriteten i miljöer där nätverk eller tjänsteleverantörer inte kan betraktas som tillförlitliga.

Först studeras hur angripare kan utföra trafikanalysattacker på krypterad nätverks-trafik genom att analysera metadata, till exempel paketstorlekar, tidsintervaller och trafikflöden. Med mönsteranalys blir det möjligt att med hög noggrannhet fastställa en användares aktivitet, även när innehållet är krypterat. Avhandlingen utforskar dessa attacker i olika områden och demonstrerar dess praktiska genomförbarhet. För att motverka attackerna utvärderas även olika skyddsåtgärder, som att skicka med extra data, fördröja sändningar eller forma om trafiken, alla som medför olika avvägningar mellan skyddsnivå, nätverksprestanda och användarupplevelse.

Avhandlingen studerar även säker databehandling i molnet med hjälp av homomorfisk kryptering, en kryptografisk teknik som möjliggör beräkningar direkt på krypterad data utan att den först behöver dekrypteras. Detta innebär att molntjänster kan behandla information utan att behöva ha tillgång till den i klartext. Trots att tekniken är lovande, har dess praktiska tillämpning försvårats av stora utmaningar i form av höga prestandakrav och komplex integrering. Avhandlingen undersöker teknikens tillämpbarhet genom olika systemdesign och algoritmjämförelser, vilket belyser både potential och begränsningar samt ger insikter för praktisk användning.

Slutligen analyseras hur det digitala certifikatsystemet, som utgör grunden för säker autentisering på webben, har utvecklats under de senaste tio åren. Genom omfattande dataanalys identifieras förändrade mönster i hur certifikat utfärdas, förnyas och hanteras. Resultaten visar på både positiva förändringar och kvarstående utmaningar, samt betonar behovet av tydligare riktlinjer och förbättrade rutiner för att långsiktigt stärka tilliten till den digitala infrastrukturen.

Sammanfattningsvis bidrar avhandlingen till en fördjupad förståelse av säkerhet och integritet i digitala kommunikationssystem. Genom systematiska analyser, praktiska experiment och långsiktiga mätningar presenteras lösningar som gör dagens och morgondagens digitala infrastruktur mer robust och tillförlitlig.

Place, publisher, year, edition, pages
Linköping: Linköping University Electronic Press, 2025. p. 103
Series
Linköping Studies in Science and Technology. Dissertations, ISSN 0345-7524 ; 2461
National Category
Security, Privacy and Cryptography
Identifiers
urn:nbn:se:liu:diva-217111 (URN)10.3384/9789181181838 (DOI)9789181181821 (ISBN)9789181181838 (ISBN)
Public defence
2025-10-03, Ada lovelace, B-building, Campus Valla, Linköping, 09:15 (English)
Opponent
Supervisors
Note

Funding: This work was partially supported by the Wallenberg AI, Autonomous Systems and Software Program (WASP) funded by the Knut and Alice Wallenberg Foundation.

2025-09-18: Updated to a smaller file size.

Available from: 2025-09-01 Created: 2025-09-01 Last updated: 2025-09-18Bibliographically approved

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