What is placement in money laundering?

Placement is the first stage in the process of money laundering, where illicit funds are introduced into the financial system. This can involve depositing cash into bank accounts, purchasing high-value assets such as real estate or luxury goods, or using money transfer services to move funds across borders. Placement is often done in small amounts to avoid detection and suspicion. This stage is critical for money launderers to effectively integrate their illegal funds into the legitimate financial system and make it difficult to trace the original source of the money.