What are the main methods used in money laundering?

Money laundering typically involves three stages: placement (introducing illegal funds into financial systems), layering (moving money through complex transactions to obscure its origin), and integration (reintroducing cleaned funds into the economy). In crypto, methods include mixing services that blend transactions, peer-to-peer exchanges avoiding identity verification, and converting crypto to fiat currency through unregulated channels. Criminals may also use privacy coins like Monero, create fake business transactions, or exploit DeFi protocols with minimal KYC requirements. Regulators worldwide now require crypto exchanges to implement Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures to combat these practices. Understanding these methods helps users recognize suspicious activity and maintain compliance.