Money laundering is the process of making illegally obtained money appear legitimate. In the context of cryptocurrency, this involves converting funds gained from criminal activities into assets that seem clean or legal.Criminals may exploit the anonymity and decentralized nature of cryptocurrencies to carry out money laundering. They might first acquire digital assets through illicit means, such as hacking or drug trafficking. Once they hold these assets, they can move them through various exchanges or use mixing services, which blend multiple transactions to obscure the original source of the funds.After several transactions, the laundered coins can be converted back into fiat currency or used to purchase goods and services, making it challenging for authorities to trace the origins of the money. As cryptocurrencies continue to gain popularity, regulators are implementing stricter rules to combat money laundering activities. Compliance measures, such as Know Your Customer (KYC) protocols, aim to increase transparency and reduce the risks associated with illicit financial flows.