ight thanks everyone i understand now
In: Economics
Many major purchase cannot be made by cash. And banks will flag and suspend accounts if they notice suspiciously large transactions/deposits in cash without some kind of explanation (eg someone owns a cash business). This will go to the relevant authorities and will usually result in some kind of investigation.
Some illegal businesses are cash businesses (like drug distribution). This poses a problem because they can’t actually spend their illegally obtained cash money and cannot simply deposit it all in a bank either to avoid investigation.
This is what money laundering is about. One method is to funnel illegal cash through a “legal” business which then could be passed off as simply business income and deposited into banks and used normally.
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