What is Money Laundering?

What exactly is money laundering or in Chinese terms 洗黑钱? Is it just stealing of money or more?

Interestingly, this term originated from the Italian mafia’s use of laundromats in the US to conceal their ill-gotten gains.

Money laundering is the process of making illegally obtained funds – often from criminal activities like scams etc – look like they come from legitimate sources.

3 steps of money laundering
💰 placement
💰 layering
💰 integration

Placement refers to the initial introduction of “dirty” money (typically in smaller amounts) into legitimate financial networks like banks.

Layering involves the moving of money across a complex maze of transactions, accounts, companies and countries to hide its original source.

Integration is when the money comes back as legitimate funds to the launderer who can then use it freely, to buy luxury items.

With this high profile case, I expect increased vigilance from financial institutions going forward. There will be a need to unwrap corporate structures beyond just the shores of one country i.e. there will be a need to use registry data (not just from ACRA) but from the registries across the world to identify any potential layering through ultimate beneficial owners tracing.

Glad that we have launched such global registry products recently to be one of the solutions for this real life challenge.

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