In the context of money laundering, what does 'stripping' refer to?

Stripping, in the context of money laundering, specifically refers to breaking down large transactions into smaller ones. This tactic helps to avoid detection by financial institutions and regulatory authorities, as smaller transactions are less likely to raise red flags. By dispersing the funds across numerous smaller deposits or transfers, the launderer attempts to make the origins of these funds less traceable, effectively masking their illicit nature. This technique is part of a broader strategy known as "smurfing," which is used to circumvent anti-money laundering controls that monitor large transactions.

In contrast, the other options describe different aspects of money laundering practices. Legalizing illicit funds involves making them appear legitimate, transferring funds between accounts could be a part of laundering but is not specific to the act of stripping, and concealing ownership pertains to hiding the actual possessor of the assets rather than the method of fragmenting transactions. Each of these has its distinct implications and methods, but they do not accurately define the stripping process as understood in money laundering.