What is money laundering?

Money laundering is defined as the illegal process of concealing the origins of illegally obtained money, often by passing it through a complex sequence of banking transfers or commercial transactions. The primary objective is to make the illicitly gained funds appear legitimate, thereby allowing the perpetrators to use that money without attracting attention or facing legal repercussions. This process typically involves three stages: placement, layering, and integration.

In the context of the options provided, the correct choice highlights the illegal nature of money laundering and its association with concealing the proceeds of crime. This reflects the legal and regulatory frameworks in various jurisdictions that aim to combat money laundering activities and promote transparency in financial transactions. The other choices either misrepresent the concept of money laundering or confuse it with legitimate financial practices, thereby reinforcing the importance of understanding its true implications in the realm of finance and law.