It's when you send cryptocurrency to an address nobody has the keys to, or that is the cryptographic equivalent of a black hole (provably inaccessible).

The problem GP is addressing is that the regulators aren't really incentivized to make the bad behavior stop because they are collecting revenue by letting it continue.

Transfering money to unspendable address. For example, $11M in 1CounterpartyXXXXXXXXXXXXXXXUWLpVr are unspendable.

https://www.blockchain.com/btc/address/1CounterpartyXXXXXXXX...