What does laundry mean?

Also known as a “mixing service”, they combine funds from various users and redistribute them, making tracing the bitcoins back to their original source very difficult by mixing their “taint”.

Also called, “mixers”, “blenders” and “tumblers” these services exist to create anonymity in Bitcoin, since the coin itself doesn’t provide for anonymity. They can take Bitcoin and trade it between various anonymous coins, so that when it is returned to the user as Bitcoin there is no way to know its origin, making it anonymous in effect. The downside to these services is a high fee, due to the numerous transaction fees created during the laundry process.