The goal of many criminal acts is to generate a profit for the individual or group carrying out the act. Money laundering involves processing these criminal proceeds to disguise their illegal origin. This process is crucial because it allows criminals to enjoy the profits without jeopardising their source.

Illegal activities such as arms sales, smuggling, and organised crime, including activities like drug trafficking and prostitution rings, can generate substantial proceeds. Embezzlement, insider trading, bribery, and computer fraud schemes can also yield significant profits, creating the incentive to "legitimise" the ill-gotten gains through money laundering.

When a criminal activity generates substantial profits, those involved must find a way to control the funds without attracting attention to the underlying activity or the individuals involved. Criminals achieve this by disguising the sources, changing the form, or moving the funds to a place where they are less likely to attract attention.