1) Get some money illegitimately (scam people, do credit fraud, sell drugs, whatever). End up with some cryptocurrency.

2) You or a partner sets up an NFT for some ludicrous amount of money. An anonymous buyer (the wallet with your dirty money, or some cryptocurrency tumbler) purchases the NFT at asking price.

3) Now you have clean money. Once you pay taxes on it, you can buy regular goods and assets without much scrutiny. If law enforcement asks where your 8 figures came from, you can point to the sale of this NFT, and say that the buyer was anonymous and that this is standard practice for NFTs/cryptocurrency trades.

If you're not careful, law enforcement might be able to prove that you (or your friend) owned the illegitimate money from 1), but with proper precautions it's much much harder to track.

Rather than use cash, they used art.

That's really it.

Someone is selling $27M in cocaine, but wants to pay taxes on and spend the $27M as legitimate money.

Rather than record a cocaine sale, they sell an NFT for $27M of crypto to a cooperative buyer, and the cocaine is delivered but never existed.