How does money laundering work? – Delena D. Spann

Money laundering is the term for any process that “cleans” illegally obtained funds of their “dirty” criminal origins, allowing them to be used within the legal economy. And the practice is about as old as money itself. But how does it actually work?

“Money laundering is the process of transforming the profits of crime and corruption into ostensibly “legitimate” assets. In a number of legal and regulatory systems, however, the term money laundering has become conflated with other forms of financial and business crime, and is sometimes used more generally to include misuse of the financial system (involving things such as securities, digital currencies, credit cards, and traditional currency), including terrorism financing and evasion of international sanctions. Most anti-money laundering laws openly conflate money laundering (which is concerned with the source of funds) with terrorism financing (which is concerned with a destination of funds) when regulating the financial system.

Some countries define money laundering as obfuscating sources of money, either intentionally or by merely using financial systems or services that do not identify or track sources or destinations. Other countries define money laundering in such a way as to include money from an activity that would have been a crime in that country, even if the activity was legal where the actual conduct occurred. There has been some criticism of anti-money laundering laws with some commentators saying that this broad brush of applying money laundering to incidental, extraterritorial, or simply privacy-seeking behaviors are like a financial thoughtcrime.” https://en.wikipedia.org/wiki/Money_laundering

 

Leave a Reply