We propose a scheme for application service providers that will allow them to provide a secure and traceable online image sharing service. To this end, a service provider needs to achieve security against unauthorized read access and traceability in the event of unauthorized write access. Digital watermarking is a promising approach for achieving traceability. However, if an image is encrypted using a cryptographic key shared between authorized users for security, it is difficult for the service provider to flexibly embed a digital watermark into the encrypted image. To overcome this encryption limitation, we propose a novel solution based on the secure multiparty computation (SMC) protocol and secret sharing scheme (SSS). Our goal is to design functions that prevent unauthorized read access, and allow the image copy path to be traced back to the user who performs unauthorized write access. The preliminary analysis of the security for our solution shows that it is significantly more secure than the straightforward operation, especially when images are shared among many users. We also implement our solution and evaluate its experimental performance. Consequently, we show that the latency overhead of our solution is reasonably small (i.e., sub-100 milliseconds) in practice.