It's much easier to follow someone using a public ledger than having to beg/subpoena banks for records with the broken/outdated AML/KYC/KYB system, with bank secrecy in many places, with banks participating in illicit activities too sometimes, etc.
> Theoretically it's possible that people use it for legal means, in practice 99% of people do not.
This is a completely made up statistic and it is showing your bias and/or ignorance about the topic. The lower estimates from industry sources like Chainalysis (0.15-0.62%) contrast sharply with higher academic estimates (23-46%) because the latter tend to include illicit activities that happen off chain but get "washed" on-chain which explains their own huge range of estimation... it is hard to quantify but nobody serious ever came close to 99%.
Something for which there are estimates close to 90% is the volume of transactions happening on centralized exchanges, and since these are required pretty much everywhere to follow AML procedures, just like traditional banks (sometimes even more intrusive than banks), it means it is just as easy, if not easier, to prosecute criminals who would use these... with the added bonus of having a public ledger with records of their activity on-chain.
How do you expect to do that, without following the money?
If someone shows up with a suitcase full of money, it's extremely unlikely that they earned this money in a legal way and paid taxes.
Same thing with crypto. Theoretically it's possible that people use it for legal means, in practice 99% of people do not.