Money laundering typologies are the recurring methods and patterns criminals use to clean dirty money. They range from structuring and trade-based laundering to shell companies and money mules, and knowing them is how firms design the checks that catch laundering.
Key takeaways
- Money laundering typologies are the recurring methods used to clean money.
- Common ones include structuring, trade-based laundering, shell companies, and mules.
- Knowing typologies helps firms build monitoring rules and train staff.
- Typologies are the methods, stages are the phases, and red flags are the signs.
- New typologies appear as criminals adapt, especially with technology.
- The FATF and similar bodies publish typology reports to share what they see.
On this page
What they areWhy they matterThe main typologiesStructuring and smurfingTrade-based launderingDigital typologiesHow firms use themTypologies vs stages vs flagsFAQsRead more
$800B to $2T
Laundered worldwide each year through these methods
Source: UNODC
1989
Year the FATF was founded, which publishes typology reports
Source: FATF
$3B
Paid by TD Bank in 2024 after monitoring failures
Source: US Department of Justice
What are money laundering typologies?
Money laundering typologies are the recurring methods criminals use to make dirty money look clean. Each typology is a recognizable technique, a pattern that has been seen enough times to be named and studied.
Think of them as a catalog of the ways laundering is done. Criminals rarely invent something wholly new; they reuse and adapt methods that work, which is exactly what makes typologies so useful to the people trying to stop them.
Knowing the methods is the first step to catching them. Read more: for real cases, see our money laundering examples.
Why typologies matter
Typologies matter because they turn a vague threat into something a firm can act on. You cannot design a control against laundering in the abstract, but you can design one against structuring or trade misinvoicing.
They shape monitoring rules, guide training, and sharpen investigations. When an analyst knows the typologies, they recognize a pattern faster, because they have seen its shape before.
Bodies such as the FATF publish typology reports precisely so that firms and regulators can learn from what has been seen elsewhere.
There is a practical rhythm to this. A method surfaces in one country, gets written up in a typology report, and firms elsewhere update their monitoring before it reaches them. Shared knowledge is one of the few lasting advantages the defenders have.
The main money laundering typologies
Laundering methods are many, but a core set appears again and again. These are the typologies most firms build controls around.
- Structuring. Breaking cash into small deposits to stay under reporting limits.
- Trade-based laundering. Hiding money in the over- or under-pricing of goods.
- Shell companies. Using companies with no real activity to move and hide money.
- Money mules. Using other people’s accounts to move funds.
- Cash-intensive businesses. Mixing dirty cash with the takings of a cash business.
- Real estate. Buying property to store and clean large sums.
- Cryptocurrency. Moving value through digital assets to obscure the trail.
Most real laundering schemes combine several of these rather than relying on just one.
A single scheme might place cash through a restaurant, layer it through a shell company, and integrate it into property, using three typologies in one chain. Recognizing that combination is often what breaks a case open.
Know the warning signs of each method
Use our red flags checklist to review customers and transactions against common laundering typologies.
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Structuring and smurfing
Structuring is one of the oldest and most common typologies. It works by breaking a large sum into many small transactions to avoid a reporting threshold.
When the work is spread across many people, each making small deposits, it is called smurfing. See structuring for detail. The aim is the same: keep each transaction below the level that triggers a report, so the total slips through unseen. It is a classic sign of the placement stage.
Trade-based laundering
Trade-based laundering hides money inside international trade. It is one of the hardest typologies to catch, because it uses the sheer volume and complexity of global trade as cover.
The method works by mispricing goods. Over-invoicing an export or under-invoicing an import moves value across borders while looking like ordinary business. Because real goods and real paperwork are involved, the money can be very hard to separate from legitimate trade.
Digital and emerging typologies
As banking has gone digital, so has laundering. Newer typologies use technology to move money faster and with less visibility.
- Cryptocurrency. Moving value through digital assets, sometimes across many wallets.
- Money mules recruited online. People persuaded to move money through their accounts.
- Fast payments. Using real-time transfers to move funds before checks can catch them.
These do not replace the old methods so much as add to them, giving criminals more tools and firms more to watch. The lesson is that new typologies rarely retire the old ones; they stack on top of them.
How firms use typologies
Firms turn typologies into practical defenses. Knowing the method is only useful if it shapes what the firm actually does.
- Build monitoring rules. Design alerts around known typologies, such as structuring.
- Train staff. Teach teams to recognize the shape of each method.
- Assess risk. Judge which typologies the firm is most exposed to.
- Update regularly. Refresh controls as new typologies appear.
Do this: get an indicative read on which risks you face most with the AML Risk Assessment.
Typologies vs stages vs red flags
Typologies, stages, and red flags are related ideas that are easy to mix up. Each answers a different question.
| Term | Answers | Example |
|---|---|---|
| Typologies | How is it done? | Structuring, trade-based laundering |
| Stages | What phase is it in? | Placement, layering, integration |
| Red flags | What are the signs? | Deposits just under a limit |
A typology is the method, a stage is the phase of the process, and a red flag is the warning sign a firm sees. Together they give a full view of how laundering works and how to spot it. Keeping the three ideas distinct helps a firm talk about laundering clearly, which matters when writing monitoring rules or explaining a case.
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Frequently asked questions
What are money laundering typologies?
Money laundering typologies are the recurring methods and patterns criminals use to make dirty money look clean. Each is a recognizable technique, such as structuring or trade-based laundering, seen enough times to be named and studied. Knowing these methods is how firms design the monitoring rules and checks that catch laundering.
Why are money laundering typologies important?
Typologies matter because they turn a vague threat into something a firm can act on. You cannot build a control against laundering in the abstract, but you can build one against structuring or trade misinvoicing. Typologies shape monitoring rules, guide training, and help analysts recognize a pattern faster because they have seen its shape before.
What are the main money laundering typologies?
The main typologies include structuring, trade-based laundering, shell companies, money mules, cash-intensive businesses, real estate, and cryptocurrency. Most real schemes combine several of these rather than relying on one. Firms build their controls and training around this core set, while watching for new typologies as criminals adapt.
What is structuring?
Structuring is a typology that breaks a large sum into many small transactions to stay under a reporting threshold, so the total avoids triggering a report. When spread across many people making small deposits, it is called smurfing. It is one of the oldest and most common methods and a classic sign of the placement stage of laundering.
What is trade-based money laundering?
Trade-based laundering hides money inside international trade by mispricing goods. Over-invoicing an export or under-invoicing an import moves value across borders while looking like ordinary business. Because real goods and paperwork are involved, it is one of the hardest typologies to catch, using the volume and complexity of global trade as cover.
What is the difference between typologies and stages of money laundering?
Typologies are the methods used to launder money, such as structuring or trade-based laundering. The stages, placement, layering, and integration, are the phases the money passes through. A typology answers how laundering is done, while a stage answers what phase it is in. They describe different aspects of the same process.
How do firms use money laundering typologies?
Firms use typologies to build monitoring rules around known methods, to train staff to recognize each method’s shape, to assess which typologies they are most exposed to, and to update controls as new methods appear. Knowing a typology is only useful if it shapes what the firm actually does to detect and prevent laundering.
What are emerging money laundering typologies?
Emerging typologies use technology to move money faster and with less visibility. They include cryptocurrency, moving value through digital assets across many wallets, money mules recruited online, and the use of fast, real-time payments to move funds before checks can catch them. These add to the older methods rather than replacing them.
Who publishes money laundering typologies?
The FATF and regional FATF-style bodies publish typology reports that share the methods they have observed. Financial intelligence units and industry groups also produce typology guidance. These reports help firms and regulators learn from what has been seen elsewhere, so a method used in one place can be watched for everywhere.
What is the difference between a typology and a red flag?
A typology is the method used to launder money, such as structuring. A red flag is a warning sign a firm might see, such as deposits kept just under a reporting limit. A single typology can produce several red flags. Typologies describe how laundering is done, while red flags are the clues that reveal it.
Do money laundering typologies change over time?
Yes. Typologies are a moving target. As soon as a control reliably catches one method, criminals shift to another, and technology creates new methods. This is why typology reports and monitoring rules need regular updating. A program built to catch last year’s typologies will slowly go blind to this year’s if it is not refreshed.
How do typologies relate to transaction monitoring?
Transaction monitoring rules are built largely around typologies. Knowing that structuring involves deposits just under a threshold, for example, lets a firm write a rule to flag that pattern. As new typologies emerge, monitoring rules are updated to catch them. Typologies, in effect, tell a firm what its monitoring should be looking for.
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Last reviewed July 12, 2026 · 11 min read · Written for compliance and risk professionals · By the WhoWiki editorial team
Key takeaway: money laundering typologies are the recurring methods criminals use to clean money, and knowing them is how firms build the checks that catch it.