Can be traced. Monero is another option but I've heard it can be traced too. I certainly wouldn't bet my life on it. But in either case you still have to convert it into cash at some point.
I believe that if someone uses something that's private by default, then its okay. However if someone uses someyhing that isn't private by default, but goes through efforts to try to hide the source of the funds, then it's suspicious.
I agree that a long-lived distributed ledger is problematic. However it sounds like you're implying that Monero can currently be traced. If you have any links to any recent/relevant research, I'm interested in hearing about it. I'm not interested in speculation or rumors like the other comment wrote.
This isn't something I made up. Criminals have been using MMO's in-game currency to launder money for over a decade. The trick is to launder slowly over a long period of time. Very hard to catch.
I used Second Life (I believe, but may have been something else) years ago (a decade ago?) because it was one of the easiest ways to put money into anonymous paypal accounts (anonymous credit cards that get accepted by paypal weren't really a thing here back then). I bought crypto, used it to buy their in game currency, then cashed out their currency to the paypal account.
You pay a few percents of fees, and it's not "the NSA will not be able to find you", but it was more than good enough for my mildly paranoid ass.