Which term is defined as funds obtained through illegal activities?

• A. Money Laundering Techniques
• B. Illicit Proceeds
• C. BSA Requirements
• D. Monetary Instrument

Answer: (B)

Illicit proceeds refer to funds that come from illegal activities. This term is used to describe the money criminals earn from crimes such as drug trafficking, fraud, or corruption, before any attempts to hide its criminal origin. Recognizing illicit proceeds is fundamental in anti-money laundering work because it identifies the source of funds that may require heightened scrutiny, reporting, and prohibiting certain transactions.

This differs from money laundering techniques, which are the methods criminals use to disguise the illicit origin of funds; it also differs from BSA requirements, which are the regulatory obligations financial institutions must follow; and from monetary instruments, which are the forms of value (like cash or checks) used in transactions, not a descriptor of where the money came from.