Yes it has been used for criminal activities but its not very bad or something due to the fact its very logical that it is done.
Every currency has this and due to that we cannot do anything to it also.
Yes every currency can be used for illegal activities. but fiat currency that will not have adverse impact if used as an illegal activity, because everyone is still using and need it. While bitcoin is only digital money with trust of its users, so that if used as an illegal activity, then having a bad impact. bitcoin can lose the confidence of investors.