It's a dilemma faced by countless criminals.

The heist, deal or operation has worked, bringing in a huge amount of money. But now where do you put it?

"Banks ask awkward questions … so the doors to traditional finance are closed," Geoff White, investigative journalist and author of Rinsed, tells ABC RN's The Money.

To hide the illegal origins and make it safe to use, the money needs to be laundered.

And in recent years, new digital technologies have offered more sophisticated — and surprising — ways of making dirty money clean.

"Criminals are really innovative. They adapt quickly and they're good at finding loopholes and spaces where they have a lesser chance of getting caught," says Jamie Ferrill, a senior lecturer and the head of financial crime studies at Charles Sturt University.

"[And] with this really rapid technology evolution, it's really hard for law enforcement to keep up."

How do criminals launder money?

Ill-gotten cash is hard to store and easy for other criminals to steal. Inflation will eventually nibble away at it. And most critically, piles of dirty money can be very suspicious.

White explains that in the classic world of money laundering, there are three steps.

The first step is called "placement", which involves getting that dirty criminal cash into a financial system.

This could be, for example, using a restaurant as a front operation and mixing the legitimate proceeds with those cocaine earnings. Then, each week, this so-called restaurant money can be deposited in a bank.

The second step is called "layering". This is all about moving the money around, to obscure the source from which it originated.

Criminals might, for example, withdraw that restaurant money, buy some gold, swap that gold back for cash and then redeposit the cash.

The final step — which White calls "the fun stage" for crims — is "integration".

It's taking the money and going on a spending spree, ideally on assets that could offer long-term returns like property or artwork, so if a stint in jail is on the cards, the gains can still be enjoyed afterwards.

But it's all extremely risky. There are severe penalties for money laundering in Australia, including up to 25 years in prison.

So how does it work online?

These money laundering steps are now being replicated and adapted in a digital environment.

In recent years, criminals have been trading some or all of their dirty money for cryptocurrencies, like Bitcoin.

Take UK sisters Abia and Shazia Din. They operated a beauty business in Manchester, along with a multi-million-dollar drug-smuggling empire.

Like most drug operations, they were selling their product for wads of cash.

They would then courier this cash to a Bitcoin broker — "a chap who had a lot of Bitcoin and didn't ask too many questions" as White explains — and get cryptocurrency in return.

The Din sisters were arrested in 2019. Abia was sentenced to 18 years in prison and Shazia got 15 years. In total, 18 people connected with them were sentenced to almost 140 years in total behind bars.

The police were able to seize all sorts of items, like Rolex watches, expensive cars and luxury clothing, which could be linked back to the drug deals.

But they were unable to seize the Bitcoin — they couldn't track and trace it.

"It's possible that when the Din sisters get out of prison, that cryptocurrency will still be there waiting for them. And given cryptocurrency values, it might be worth more than when they put it in," White says.

But authorities around the world are getting much better at confiscating crypto, seizing hundreds of millions of dollars worth.

And there have been several recent cases in Australia of alleged money laundering operations where crypto was partly used, with arrests made.

The tools that hide the crypto

But laundering money through cryptocurrency comes with its own challenges.

This is because every crypto transaction is recorded on a blockchain, which is basically a publicly available, online ledger.

"In terms of tracing someone, you can't get more transparent [than cryptocurrency]," says Steven Conway, course director of games and interactivity at Swinburne University of Technology.

Unlike regular cash, each "dodgy action" is tracked and "everyone can see it", Dr Conway explains.

But if you're running a drug empire, a virtual paper trail attached to your money is the last thing you want.

So to camouflage the trail of crypto, there are nifty — but not faultless — digital services called "mixers".

For a fee and with a few clicks of a mouse, launderers can put their cryptocurrency into one of these digital mixers, which will spit it out clean.

"These services mix cryptocurrency together from a number of different users, which obscures the transaction trails and makes it really hard to trace the original source," Dr Ferrill says.

There are some legitimate uses for these services, like ensuring privacy for crypto transactions, but White says they're "almost custom built" for money launderers.

One popular example was called Helix. The darknet-based mixer helped launder millions of dollars worth of Bitcoin, but was shut down in 2017 and its American creator was arrested and jailed.

Laundering after a cyber heist

Axie Infinity is an online game where users can raise and battle salamander-like digital pets called axies.

It may sound like an unlikely setting for a major crime.

But inside the game, players can buy and sell all sorts of things, like potions for their axies and the axies themselves.

The game became wildly popular during COVID, particularly in Southeast Asia, meaning there was a sea of cryptocurrency sloshing around inside the game.

Then in 2022, North Korean-sponsored hackers struck. They managed to take over computers connected to the game and steal US$625 million (AU$926 million) in just 1 minute and 55 seconds.

White calls it "the biggest cyber heist in history, and I think, a strong contender for the biggest theft in history".

But after stealing it, the hackers had to launder it, so they turned to a crypto mixer called Tornado Cash. The crypto was mixed and then it was gone.

The US put Tornado Cash under sanctions, thanks to the North Korea link, and people connected to the mixer were later arrested.

But this left some in the crypto and tech communities angry.

White says they argued that services like Tornado Cash were essential privacy tools, and without them, "we have no secrecy, we're under surveillance".

Buying and selling digital goodies

Dirty money can also be cleaned inside the actual world of video games.

Counter-Strike: Global Offensive (CS:GO) is one famous example. Released in 2012, it's a first-person shooter game where terrorists and counter-terrorists battle it out.

Players can add cosmetics to their weapons from virtual containers known as "loot boxes" — opened by virtual keys that are bought via the in-game purchasing system or from other players.

With millions of people playing the game each month, the trade in loot box keys boomed. They became a hot commodity. 

White points out that most people "probably don't care a jot if we can upgrade our in-game AK-47 assault rifle with the iconic Fire Serpent design".

"But for some avid players of the game, that upgrade is worth as much as US$5,000 [AU$7,000]."

Enter the money launderers. They used their dirty money to buy CS:GO loot box keys, sold the keys onward in the marketplace, and voilà, had much cleaner money.

And it was a big deal, with criminals taking over the trade.

"At this point, nearly all key purchases that end up being traded or sold on the marketplace are believed to be fraud-sourced," CS:GO creators Valve said in 2019.

So the game creators stopped keys being traded and the company has cracked down on criminal activity.