What is the process of making illegally obtained money appear legitimate known as?

The process of making illegally obtained money appear legitimate is known as money laundering. This term encompasses the entire series of actions that individuals or organizations undertake to make illicit funds appear as though they were acquired through legal means. Money laundering typically involves three key stages: placement, layering, and integration.

In this context, placement refers to the initial introduction of illicit funds into the financial system, layering involves concealing the source of the money through complex financial transactions, and integration is the final stage where the laundered money is fully integrated into the legitimate economy and can be used without raising suspicion.

The term "money laundering" itself highlights the transformation of dirty money into clean money, indicating that the illicit origins are hidden and made to appear legitimate to evade law enforcement scrutiny. Understanding money laundering is crucial for recognizing and preventing financial crimes.