Bitcoin allows an individual to make multiple addresses through which they may facilitate transactions on a large scale. One person may create numerous address and wallets which aren’t even required to be linked to each other in anyway.
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The sole reason Bitcoin, as a currency can be tracked is due to the underlying technology that fuels this whole operation, the Blockchain.
Various countries are trying to curb Bitcoin involvement in Money Laundering and Tax evasion by implementing a multitude of laws and acts, however, the market is still unrestricted and people transact on a daily basis anonymously across many countries.
Since Bitcoin isn’t required to be converted back to a fiat currency at any point due to its value to within the ecosystem, Bitcoin is self-sufficient to be traded within the Bitcoin ecosystem anonymously.
In spite of the multitude of Laws employed and incorporated, Governments are a little late towards regulating Bitcoin as a currency.
Bitcoin was designed to be anonymous in a fashion where people may rotate bitcoin within different wallets to throw governments and legal enterprises off track.
Illegal activities have in numerous ways by which their tracks can be masqueraded and thus evade the law.
Conclusion: The reason Bitcoin is famous for being used in Illegal activities is due to a number of tools available to masquerade their trail.