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A secure content distribution scheme is presented in this paper, which can trace illegal distributors in Peer to Peer networks. In this scheme, the encrypted content is decrypted into different copy under the control of a fingerprint (e.g., peer ID) and encryption key at the peer side. Thus, each decrypted media copy contains a unique peer ID that identifies the peer. For the decryption operation and fingerprint embedding operation are combined together, which avoids the leakage of clear media content. Additionally, these operations are implemented by the peer, which makes the scheme compliant with existing peer to peer digital rights management (DRM) systems.