Categories: Business Plans

Money Laundering: Its Definition And Techniques

Money -Laundering:- Its -Definition- And- Techniques

Money Laundering is a process of converting the black money into white. Or else you can say that it is a term which is used to describe the method of disguising the identity of the money owner who owned the money in an illegal manner. These are the simple definition of criminal activity called money laundering, to know more about it we will be looking at the following things.

Why criminals launder money?

There are many illegal resources from where criminals earn money like illegal casinos, drug trafficking, sex trafficking, extortion or blackmailing etc. so how are they going to use this illegal money legally? To use their money legally they have to launder money.

Money Laundering is the tricky method, only a financial expert can do it easily. There are following steps involved in money laundering.

  • Getting the money by putting it in the financial system
  • Doing the multiple transactions by concealing a particular identity
  • Making the money legit to use freely

Different types of money laundering techniques

Criminals often find one way or the other to do the illegal things, there are some of the common ways which they use to launder money into the legitimate financial system. To know more about it read the following points given below.

  1. Smuggling cash to other countries

Criminals smuggle money in bulk to different countries as many of the banks provide client secrecy.

  1. Breaking the bulk

It is a method in which a bulk is broken into small amounts and are distributed in various accounts.

  1. Laundering through cryptocurrency

    Ilan- Tzorya
    Ilan Tzorya

Some criminals use cryptocurrency to launder money. A guy named Ilan Tzorya is the owner of a cryptocurrency which was used to launder money.

  1. Laundering through business

This is one of the common methods, in this, the money is laundered by layering it with the earnings of the big businesses. Big businesses are able to convert this money easily.

  1. The shell companies

The shell companies are the companies which are active only on papers not in reality.

  1. The Bankers

There are many bankers who own banks to launder their money so that they can easily transfer funds.

  1. Casino

There are some big casinos who use their chips to launder money. It makes the dirty money legal.

  1. Real estate

If someone buys a property with illegal money and sells it legally then the cash becomes legal.

Money laundering is the backbone of the criminal organizations that’s why there are many laws are made to protect people’s money and stop these kind of crimes.