Law enforcement could signficantly hamper cybercriminals’ ability to convert cryptocurrency into cash by identifying and prosecuting the owners of the “surprisingly small” number of deposit address service providers responsible, according to a report.

Chainanalysis’ 2021 Crypto Crime Report found that 270 service deposit address accounted for 55% of illicit cryptocurrency funds globally in 2020. They received $1.3bn of laundered funds, and a smaller group of just 24 received more than $500 million.

According to Chainanalysis, this concentration is greater than in 2019. There is also a much greater share of illicit cryptocurrency going to addresses taking in between $1 million and $100 million worth of cryptocurrency per year.

Chainalysis said many of the deposit addresses belong to third party services who “explicitly or implicitly” provide money laundering services to cybercriminals.

These services are often “nested services”, meaning they operate within larger exchanges.

It said: “We believe the growing concentration of deposit addresses receiving illicit cryptocurrency reflects cybercriminals’ increasing reliance on a small group of OTC brokers and other nested services specializing in money laundering.”