What would Walter White do today? He wouldn’t be laundering cash through a car wash, he’d be moving tokens through mixers and NFTs. The game hasn’t changed, just the tech. The same three steps still drive it, placement, layering, integration, only now the money moves at digital speed. Launderers no longer need stacks of cash or shady casinos; they hide in code, using wallets, gaming platforms and digital art to clean billions before anyone even notices.
Old School vs New School: How Money Laundering Learned New Tricks
Imagine a criminal in a fedora walking into a smoky casino, pockets heavy with ‘dirty’ banknotes. He buys chips, loses a little, cashes out and walks away with “clean” money. That scene belongs to the classic textbook on money laundering. Modern offenders use smartphones, anonymous wallets and online marketplaces instead. The game is the same: make dirty money look clean. The rules have changed.
Globally, money laundering is not niche or rare; credible estimates put it at 2–5% of world GDP, up to around $2 trillion each year, while only about 0.1% is ever recovered. As technology evolves, so do the tactics. Launderers increasingly use cryptocurrencies and decentralised finance to move value at speed and at scale, often routing flows through Asia-Pacific, which accounts for roughly 40% of global laundering activity.
The risk is not only financial loss. Reputational damage, regulatory penalties, and throttled investment follow jurisdictions and firms that miss these patterns. Understanding the classic placement–layering–integration model, and how digital tools now turbocharge each step, is the difference between spotting noise and seeing the story.
This piece breaks the trade into simple, memorable chunks. It compares old school techniques with new school innovations, explains the familiar three-stage laundering model, and shows how tracing moving money is like following a trail of breadcrumbs, until the breadcrumbs vanish.
The three-stage model: placement, layering, integration
Most launderers follow a familiar sequence. Use these three words as a map.
- Placement: Illicit cash enters the financial system. Examples include depositing banknotes, buying high-value goods, or converting cash to digital currency.
- Layering: Transactions multiply to obscure origin. Money moves through accounts, jurisdictions, wallets or businesses, so tracing becomes difficult.
- Integration: Funds re-enter the legitimate economy, appearing to be lawful income, often via property, investments, or sales of goods.
That pattern remains true whether the money once came from a 1920s bootlegging ring or a 2020s cyber-heist.
Old school playbook: the classics that still work
Old school laundering relied on the physical economy and gaps in regulation. These methods are well known, but they still turn up for good reasons: cash is anonymous, physical assets retain value, and human gatekeepers make mistakes.
Casinos and gambling: Buying chips with dirty cash, playing briefly, then cashing out a cheque was a staple example. Casinos generate plausible gambling income that can hide large cash inflows.
Cash businesses: Bars, restaurants, taxi companies and car washes provide easy cover (think Walter White in Breaking Bad). Operators can overstate takings and mix illicit cash with legitimate sales, creating plausible receipts.
Structuring (smurfing): Large deposits are split into smaller amounts to avoid reporting thresholds. Many small transactions look normal, but when added together, they represent large sums.
Shell companies and invoice fraud: A company with no real activity invoices for fake services. Payments follow the paper trail and appear to be business revenue. Cross-border shell companies complicate ownership and accountability.
Real estate and high-value goods: Buying property, art or luxury cars is a classic integration move. Real estate especially provides ways to hold and later sell wealth that looks legitimate.
Second-hand goods flips: Buying a used car or electronics with cash and selling them shortly afterwards creates a record of a legal sale. Timing, dubious valuations and cash handling help obscure origin.
Old school techniques tend to leave traces: physical paperwork, human intermediaries, and geographic choke points such as local banks and registries. Regulators and investigators have created rules to catch many of these, but criminals adapt.
New school playbook: tech, anonymity and clever intermediaries
New tech brings new loopholes and speed. Modern launderers combine digital-native tools with old instincts for hiding money.
Crypto mixers and tumblers: Crypto transactions are transparent on blockchains, but mixers blend many users’ funds and return outputs that cannot be linked cleanly to inputs. A wallet’s history can evaporate into a pool, mirroring the layering step of traditional laundering.
Peer-to-peer marketplaces and gaming platforms: Illicit funds move through online games, buying virtual goods or skins that are later sold or cashed out. Gaming economies provide plausible reasons for microtransactions and rapid movement.
Online gambling and betting sites: Web-based casinos accept e-payments and cryptocurrencies. Winners cash out via e-wallets, banks or crypto exchanges that offer fiat offramps.
Trade-based laundering with e-commerce: Over- or under-invoicing of goods shipped around the world lets value move without showing as a cash deposit. Digital invoices and fast shipment records blur the audit trail across jurisdictions.
NFTs and digital art: Purchases with crypto can be used to pass value between wallets. Sophisticated laundering can create multiple sales at inflated prices, moving money while leaving a public, plausible trail.
Prepaid cards and gift cards: Criminals buy bulk gift cards with dirty funds, then resell them or redeem them on platforms that convert value back to fiat.
Cross-border friction and challenger banks: Fintechs and small banks operating in multiple jurisdictions can be used to route funds, exploiting regulatory gaps and time-zone differences to create complex chains.
New school techniques often leverage speed and scale. Transactions happen in minutes. Jurisdictions differ wildly on reporting and enforcement. When funds hop through ten wallets, two exchanges and three countries, investigators face a thicket.
When Crypto Mixing Becomes the New Layering
Crypto mixers act like digital layering. Consider the analogy:
A blockchain shows every transaction like footprints in snow. Tracing is easy until those footprints enter a crowded plaza filled with thousands of people walking in every direction. Mixers are that plaza. Funds from countless users are thrown together, shuffled, and sent out again in fragments and at random intervals. Once the money leaves, it’s nearly impossible to match which wallet it came from or where it’s headed next.
In essence, a mixer breaks the direct line of sight between sender and receiver. The transaction record still exists on the blockchain, but it becomes meaningless noise, a blur of data points that no longer tell a clear story. This creates a digital version of anonymity that mirrors what traditional launderers have always tried to achieve through complex paper trails and shell companies.
That’s why crypto mixing is often compared to layering, the classic middle stage of money laundering. In traditional systems, criminals use tools and techniques designed to move and disguise money through a series of transactions, such as:
- Multiple bank transfers across unrelated accounts or institutions.
- Offshore companies and shell entities created purely to move funds.
- False invoicing or consulting contracts that provide fake justification for transfers.
- Nominee directors or third parties who act as a buffer between the criminal and the money.
Each step adds distance and confusion, making it harder for investigators to link the funds back to their criminal origin.
Both methods share the same purpose: obscurity through complexity. They rely on:
- Movement, so the money doesn’t sit still long enough to attract scrutiny.
- Volume, flooding systems with legitimate-looking transactions that bury red flags.
- Timing, staggering transfers and exchanges to break continuity and erase clear trails.
Whether it’s a crypto mixer shuffling tokens in milliseconds or a web of offshore entities moving dollars across borders, the logic remains identical, making the funds look ordinary by surrounding them with enough noise that no one can tell where they truly began.
This is why investigators sometimes “lose” the trail. Once money passes through enough layers, digital or otherwise, the pattern dissolves into the legitimate economy. The system’s design, built on speed, scale, and decentralisation, gives criminals plausible deniability and leaves auditors chasing ghosts.
The FBI’s ongoing case against Roman Semenov, alleged co-founder of the Tornado Cash mixer, illustrates how modern layering operates in practice, blending anonymity tools and blockchain technology to obscure billions in illicit transfers.
Cross-border laundering: more jurisdictions, more complexity
Sending money through multiple countries complicates enforcement. Different laws, bank secrecy, and slow international cooperation create windows for criminals to exploit. A typical cross-border chain might look like:
- Cash deposited in jurisdiction A.
- Transmitted to a corporate account in jurisdiction B.
- Converted to crypto in jurisdiction C and mixed.
- Converted back to fiat in jurisdiction D into a benign-looking business.
Each step adds friction to the investigation. Delays in legal requests, sealed ownership records and the use of privacy services all multiply the challenge.
The Laundering Playbook in Action
Practical, easy-to-visualise examples show how traditional and modern laundering methods share the same underlying logic.
Old school
A criminal network overstates takings across a chain of cash-heavy restaurants. Illicit notes are mixed with genuine sales, deposits are split across multiple branches, and the consolidated company accounts are later used to buy farmland and a fleet of delivery vans.
- Placement: cash hidden in daily takings at multiple outlets
- Layering: staggered deposits and internal transfers to company accounts
- Integration: purchase of land and vehicles presented as a business investment
New school
Stolen crypto is swapped on a decentralised exchange, routed through a mixer, and then used to buy NFTs. The NFTs are “sold” to other wallets controlled by the same ring at inflated prices; proceeds are withdrawn through a crypto-friendly exchange with weak KYC.
- Placement: conversion of illicit proceeds into cryptocurrency
- Layering: chain-hopping, mixer use, and NFT wash-sales to create distance
- Integration: cashing out via an exchange and presenting funds as legitimate trading revenue
Hybrid
Cash is converted to crypto at an OTC desk, moved through multiple wallets and mixers, then wired back as a “loan” to shell companies in another country. The companies repay exaggerated consultancy fees, creating a path that looks like normal business finance.
- Placement: cash swapped for crypto to enter digital rails
- Layering: wallet transfers, mixing, and cross-border wiring to shell entities
- Integration: repackaged as legitimate loans and consulting payments
Each example follows the same logic, placement, layering, and integration, adapted to the tools available. The surface details change; the laundering rhythm does not.
Three simple rules to spot the pattern
Money laundering still follows the same three-stage rhythm; focus on the process, not the tool.
- Same pattern, new tools. Placement, layering, and integration remain the map. A mixer, NFT sale or cash-heavy till all play the same role: get value into the system, scramble the trail, then reintroduce it as legitimate.
- Spot the disguises. Virtual goods, gaming economies and crypto services are modern equivalents of casinos and cash businesses. Look for activity that doesn’t fit the customer’s profile or the normal business story.
- Ask the sharp questions. Who truly owns the wallet or account? Who benefits financially from the transaction? Why does the behaviour deviate from expected norms for this customer or sector?
Practical controls close the loop: stronger source-of-wealth checks, behaviour-based monitoring that flags velocity and circular flows, and linking on-chain analytics to off-chain identity all turn noisy data into an investigable story.
Same Game, New Rules
Money laundering is a shape-shifter. Old tricks like casinos and cash businesses remain reliable for criminals. New tools like mixers, NFTs and online gaming offer speed and anonymity. The best defenders treat laundering as a pattern-detection problem. Tracing the money is about following the story of the funds, not chasing a single transaction. Teach teams to read the story, spot the red threads and stop them before integration makes the problem irreversible.
