Syndicates take advantage of crypto for money laundering because it is easy to transfer funds across different countries without the hassle of funds being checked if it's legal or not. If you are transferring illegal funds crypto is the safest way because of the anonymity it offers and decentralization. That is why most people have a perception that crypto is illegal which is wrong.
This depends on the crypto currencies being used. There are a lot of crypto currencies that are not actually anonymous as you can still track where the funds go while fiat, you never know where it will go or where it went. People are taking advantage of the features of cryptos, I agree that most of the people are mistaking it as illegal but actually, they are taking advantage of it and it is not actually a scam or illegal.
Hard to track if there is no KYC, but talking about FIAT, I think it's easy as long as it passes through banks since every bank accounts undergoes a real KYC verification where you have to go to the bank, seen by the personnel who will verify face to face so they would know who are the real owner of the accounts, unlike in crypto exchanges where it's easy to fake the verification requirement.
If someone will try to do illegal transaction using fiat, he must be smart enough to just move a paper money, otherwise it's not safe, some with crypto, use an anonymous coins and never pass through regulated exchanges.
If the movement does not cross borders, fiat offers a more convenient option to people who are involved with illegal transactions. It is to be done through cold cash. Cash is very hard to track for law enforcement personnel. It is much easier to use than most of the cryptocurrencies. Cryptocurrency is transparent, although some are strictly anonymous.