Yeah, because of its anonymous transaction it can be used for illegal activities. Like buying illegal drugs or some deadly weapons. Often, it is used as a currency in the deepweb by drug or weapon dealers where they can sell their products easily without knowing who are they or where they are.
That's why many criminals are taking advantage of bitcoin and they are using it for their different illegal transactions.
Because they are evading the government for the rules and regulations that a country implements so they are hiding themselves.
And because of bitcoin, they are able to make trades easily and get paid.
So, what do you suggest to be done? Cancel Bitcoin or use identified transactions like normal currencies, then bitcoin will lose its advantages, which attracted people to it, in the first place.
There is Money Laundering that is engaged in a financial transaction with the proceeds of a crime for the purpose of concealing the illicit origin of the property/deal from government, which is done with traditional currency just like an anonymous transaction of Bitcoin(though, I know that digital currencies made it quite easier than traditional money laundering).