[Terr_]

No, laundering it's far more specific than that, it means the original money is somehow "dirty" (revenue from criminal activity) and is being "cleaned."

In contrast, a Ponzi scheme can operate just fine with 100% clean investment money coming in some unsuspecting victims, and the (smaller) amounts flowing back as dividends would also be clean.

[LargeTomato]

The most precise definition of money laundering may be that. But in general, laundering anything means to pass it off as something it may not be, particularly in a dishonest way.

But good on you for really getting your definitions down I'm sure you're super fascinating at parties.