What is crypto money laundering?

Could you elaborate on the concept of crypto money laundering? I've heard of traditional money laundering, but how does it translate to the cryptocurrency world? Is it simply the illegal transfer of illicit funds through cryptocurrency platforms? Or does it involve more complex mechanisms, such as the use of anonymous wallets and decentralized exchanges to obfuscate the source of funds? Could you provide an example scenario of how crypto money laundering might occur and the potential implications it poses for regulators, law enforcement, and the overall financial system?