In banking and financial services, money laundering usually conceals the source and whereabouts of illegal funds by designing complex transaction structures to make them seem legal. The following are some techniques that may be abused, but it should be clear that these behaviors are illegal and violate global anti-money laundering (AML) regulations. Financial institutions and regulatory agencies have taken strict measures to monitor and combat them. --- ### **1. Layered trading (Layering)** This is the core stage of money laundering, blurring the path of funds through multi-layer transactions： -**Cross-border transfer and offshore accounts**: Take advantage of regulatory differences in different jurisdictions to transfer funds through accounts in multiple countries or regions (for example, through offshore financial centers, tax havens). -**Shell Companies**: Create shell companies with no actual business, fictitious transaction contracts or services, and disguise illegal funds as corporate income. -**False trade**: By falsifying import and export invoices (such as overstatement or understatement of commodity value), funds are transferred across borders and “legalized”. -**Complex financial instruments**: Use derivatives, securitization products, cryptocurrencies and other tools to cut off the tracking of the fund chain through multiple buying and selling or mixing coins (such as coin mixers). --- ### **2. Integration stage (Integration)** Re-inject “laundered” funds into the legal economic system： -**False investment**: By purchasing high-value assets such as real estate, art, and luxury goods, and then reselling them in the form of legal transactions for cash. -**Loan money laundering**: Use illegal funds as collateral to obtain bank loans and legalize the funds in the name of “repayment”. -**Casino and virtual currency**: Use the exchange of casino chips or the anonymity of cryptocurrency exchanges to convert capital attributes. --- ### **3. Exploit vulnerabilities in the financial system** -**Agency Banking relationship (Corresponding Banking)**: Process cross-border transactions through the accounts of cooperative banks to avoid direct supervision. - **Split transaction (Smurfing)**: Split large funds into multiple small transactions that are below the threshold of anti-money laundering reporting (such as each transaction is less than 10,000 US dollars). -**Abuse of trusts and foundations**: Hide actual beneficiaries by setting up complex legal structures (such as family trusts). --- ###**Countermeasures and compliance requirements** In order to prevent the above behavior, financial institutions and regulatory agencies have taken the following measures： 1. **KYC (know your customers)**: Strictly review customer identity, source of funds and business background. 2. **Transaction monitoring system**: Use AI and big data to analyze abnormal transaction patterns (such as frequent cross-border transfers and circular transactions of linked accounts). 3. **Regulatory collaboration**: Sharing intelligence through FATF (Financial Action Task Force on Money Laundering), central banks and other institutions. 4. **Key reviews in high-risk areas**: for example, cryptocurrency trading, the art market, the luxury industry, etc. --- ###**Important reminder** Any attempt to launder money through complex transactions is a serious crime and may lead to criminal charges, huge fines and loss of reputation. Financial institutions and practitioners need to strictly abide by anti-money laundering regulations, and the public should also be vigilant to avoid inadvertent involvement in illegal activities.