Money laundering is the illegal process of disguising proceeds from criminal activities in a way that makes them appear to have been legally obtained. In a money laundering scheme, criminals typically perform multiple financial transactions or transfers to obfuscate the original source of the funds, making it difficult for authorities to track and possible to spend without raising suspicion.
Use case/ examples for money laundering
Transaction monitoring: Detecting suspicious patterns in deposits, transfers, and withdrawals that may indicate laundering activity. This includes monitoring individuals who, for example, may be acting as money mules, as well as shell companies or otherwise legitimate businesses that may be used to deposit and transfer illegally obtained funds.
Customer due diligence: Verifying the source of funds, especially for new accounts, and monitoring customer behavior to prevent illicit money from entering financial systems.
Compliance reporting: Identifying and reporting suspected money laundering activities to regulatory authorities through Suspicious Activity Reports.
