What is money laundering, and why is it necessary?

Money laundering is a criminal process by which individuals or organizations attempt to make illegally obtained or "dirty" money appear legitimate or "clean." It involves a series of transactions or activities designed to obscure the true source of the funds, making it difficult for authorities to trace the money back to its illegal origins. Money laundering serves several purposes for those engaged in criminal activities:
Concealing Illicit Gains: Criminals often generate significant profits from illegal activities like drug trafficking, corruption, tax evasion, fraud, or organized crime. Money laundering helps them hide these illicit gains and integrate them into the legitimate economy.
Avoiding Detection: By laundering money, criminals aim to avoid detection by law enforcement agencies and financial institutions. Money that has undergone the laundering process can be used for various legal purposes without raising suspicion.
Preserving Wealth: Money laundering enables criminals to preserve and protect their wealth. By converting illegal proceeds into legitimate assets or investments, they can enjoy the benefits of their ill-gotten gains without risking the confiscation of their assets.
Facilitating Further Crimes: Laundered money can be reinvested into criminal enterprises, allowing criminals to expand their operations or fund additional illegal activities. This perpetuates criminal networks and contributes to ongoing criminal behavior.

https://www.kychub.com/blog/anti-money-laundering-aml/