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“Money Laundering” implies:
Generating black money through tax evasion
Generation of black money through crimes such as drug trafficking, mafia, terrorism, etc.
Generation of black money through Hawala
Cleaning and whitening of black money generated through crimes
2nd option is correct. Money laundering is the process of creating the appearance that large amounts of money obtained from serious crimes, such as drug trafficking or terrorist activity, originated from a legitimate source. There are three steps involved in the process of laundering money: placement, layering, and integration. Placement refers to the act of introducing "dirty money" (money obtained through illegitimate, criminal means) into the financial system in some way; "layering" is the act of concealing the source of that money by way of a series of complex transactions and bookkeeping gymnastics; and integration refers to the act of acquiring that money in purportedly legitimate means.
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