AFAIK, even governments have no way to trace such activity in crypto transactions if one is already made for money laundering. IF, they know how to mix their coin for harder tracing the transactions.
The government should not worry about tracing cryptocurrencies but if they are legalized and every exchanges uses mandatory KYC once you convert your coins you need to explain to the government about the source of your amount. Considering the laundering amounts are huge it is impossible to do trades outside the exchange.
Despite saying that laundering might be possible but it is hard and it is easier to do that with fiat as people are laundering fiat for a long time and anyone who are deep into the shithole of making money illegal knows how to deal with them.
I don't say that money laundering is easy but the way they show it in tv programs and movies they make it seem easy for criminals like they just create a fake business or something that earns millions aside from the fake business they also have these shell corporations where they just make it look like their personal banks where they just sit their money there. With the use of cryptocurrencies it just uncomplicates things since they can just send their money back to them just to make it look like they are earning it.