Placement
The first stage of money laundering: moving criminal proceeds into the regulated financial system - typically the riskiest moment for the launderer.
Definition
Placement is the entry of illicit funds into the legitimate financial system. Cash is the canonical placement medium, but modern placement increasingly involves online gambling deposits, prepaid cards, crypto on-ramps, real-estate down-payments and the cash-intensive DNFBP sector (dealers in precious metals and stones, art, antiques).
Common placement techniques
- Direct cash deposits - sometimes via smurfing.
- Cash-purchased monetary instruments (cashier's checks, money orders).
- Co-mingling with legitimate cash-intensive business revenue (restaurants, car washes, casinos).
- Fiat-to-crypto on-ramps via a non-KYC peer-to-peer broker.
Why it is the riskiest stage
Placement creates the first paper trail. Once the funds are in the system, they can be shuffled through layering almost indefinitely; but placement is when AML controls - cash thresholds, CTR filings, source-of-funds questions - have their best chance to bite.
Regulatory anchor
FATF Recommendations 10 (CDD) and 20 (STR filing); EU AMLR cash limits (€10,000 EU-wide cap on cash payments under the upcoming framework); US BSA §5313 currency transaction reports.