The concept could mean different things to different people, but basically
would be something along the following lines: "Taking or allowing cash/credit
that was used from a crime/illegal act/theft and using that to purchase either
bitcoins or altcoins, in order to hide the links from the original crime/
illegal act/theft.

For example, I steal 10,000 USD from a bank, I then buy bitcoins with all
the money on localbitcoins or with other p2p cash trades. Eventually, I will
have around 10,000 USD converted into bitcoins. I then use those bitcoins to buy
other altcoins to mix them more, possibly monero, and then reconvert back into
bitcoins, where I now sell those bitcoins on localbitcoins or other p2p cash trades.
When I receive new money that is not associated with the original 10,000 USD,
I have "laundered" that money.

Besides committing the original crime, laundering would be an additional crime.