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A large single order that has been divided into smaller limit orders, usually through the use of an automated program, for the purpose of hiding the actual order quantity from foreign eyes. Iceberg orders are not necessarily illegal, but construed for privacy purposes.
Large, institutional traders typically utilize iceberg orders as their preferred technique because they are the types of traders that buy and sell securities in exceptionally large quantities. They use iceberg orders as a trading technique that helps enable them to get the best possible buy or sell price when trading stocks or other financial securities.
Using iceberg orders is not always done with bad intentions but it is still illegal if it helps the buyer avoid KYC (Know Your Customer) procedures. Even for the sake of obtaining a better price, sellers have a right to know the customer they are handing over an asset to, and whether multiple buyers are in fact the same person concealed.
Extra reading:
https://corporatefinanceinstitute.com/resources/equities/iceberg-order/
https://www.investopedia.com/terms/i/icebergorder.asp
https://www.interactivebrokers.com/en/trading/orders/iceberg.php
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