arXiv:2610.27470v1 Announce Type: new Abstract: Federated learning (FL) is a distributed machine learning paradigm that reduces transmission costs, mitigates cross-border data sharing restrictions, and enhances privacy by keeping raw data on local devices. Clients in FL systems train local models and share only updates, which are aggregated by a central server. While this setup limits direct data exposure, FL remains vulnerable to privacy attacks. Existing attack and defense strategies have largely been developed for centralized systems, and adapting them to FL introduces new challenges due to its unique architecture and training workflow. In this work, we first propose a model inversion attack on FL systems using Deep Convolutional Generative Adversarial Networks (DCGANs) in the context of large-scale medical imaging. Our method operates under realistic assumptions about the attacker's knowledge and capabilities. We then examine the effect of client-side differential privacy (DP) in mitigating privacy leakage and incorporate personalized FL to improve model performance under DP settings. Experiments on the Brain MRI ND-5 dataset show that DCGAN-based attacks can reconstruct semantically meaningful synthetic images, revealing significant risks to the privacy of training data. Applying DP reduces attack success but introduces an accuracy trade-off, which is further overcome by personalized FL at each client side. We also evaluate how different aggregation algorithms affect both attack vulnerability and defense effectiveness, underscoring the critical role of aggregation strategies. The proposed attack-and-defense framework is model-agnostic and applicable to a wide range of FL-based systems.