What is the first stage in the money laundering process?

The first stage in the money laundering process is placement. This phase involves the introduction of illegally obtained funds into the financial system. It serves as a crucial starting point where the illicit money is separated from its source, making it more challenging to trace. During placement, the money launderer might deposit the cash in banks, use it to purchase assets, or mix it with legitimate business revenues. This step is critical because it sets in motion the subsequent stages of money laundering, which include layering and integration, designed to obscure the original source of the funds and ultimately make the money appear legitimate. Understanding this initial phase highlights the importance of vigilant monitoring and regulation in financial institutions to detect and prevent the movement of illicit funds.