USD used many illegal activities I think because it is main currency in the world to be the benchmark currency of the countries in the world, so widely spread. USD it became many used for illegal activities like terrorism and illegal war because of its spread widely so that it can be reached by people who are not responsible. The use USD for legal or illegal activity actually depends on each person who uses that can not be avoided and unruly spread.
That's right, currency is basically a tool and don't have an intelligence so even some currencies being used for illegal activities it's can't be concluded as those currencies were getting involved into crimes and after that it's prohibited, some media sometimes just too hypocrite and always making the images of their opponent looks bad by spreading bad news about it,but at the end it's just a currency
Everything is being used for illegal activities even if it is currencies or not. For easier trades, most of the people choose currencies to involve in illegal activities. In the future, Bitcoin will be soon used for illegal purposes such as USD is being used right now.