Question

Moving, dispersing, or disguising illegal funds or assets to conceal the true origin is which part of the money laundering cycle?

Option 1: Placement
Option 2: Layering
Option 3: Integration
Option 4: Detection

Answer 1

Layering is the part of the money laundering cycle that involves moving, dispersing, or disguising illegal funds or assets to conceal their true origin.

Step-by-step explanation:

The correct part of the money laundering cycle that involves moving, dispersing, or disguising illegal funds or assets to conceal their true origin is Option 2: Layering. Layering involves creating complex transactions or a series of financial transactions to make it difficult to trace the original source of the funds. This process typically includes various financial transactions such as wire transfers, investments, or purchasing and selling assets in different countries.

For example, someone engaging in money laundering might transfer funds from one bank account to another, purchase properties using the illicit funds, sell those properties, and invest the proceeds in another country's stock market. The goal is to create layers of transactions that make it challenging for authorities to track the money back to its illegal origin.