i remember in fiat currency the situation whereby the paper notes can be traced through the unique encrypted numbers on them if found with a criminal record or stolen, such can be traced especially when you make such mistake by taking the notes to the bank, one will easily be apprehended and query on the process of the acquisition of the fund till the last culprit is gotten, but we have to understand that this is not applicable in a decentralized currency like bitcoin, though one can be suspected and traced if performing a huge transaction that may alarm the system and making use of centralized exchange can be the process of entry on such user.
That is only valid if you caught it on the criminal. So let's assume that you stole money from a bank, and the numbers were tracked, and they find it on you, they will take it away and jail you. However, if someone robbed a bank, then bought a pack of cigarettes and used it, then you bought a chocolate at the same place and got money in return, then the money will be in your pocket and they can't take it.
This is why fiat would be dangerous at the same method as crypto as well. Because if you stole crypto then it would be bad and you could be caught, but if you didn't steal the money, someone else did, then you should feel fine about the crypto in your account.