So does physical fiat currency, and physical fiat currency is virtually untraceable, unlike bitcoin, which has a public ledger for every transaction (although it is pseudo-anonymous).

You want to ban that so drug dealers have to find a more creative way to make money? (And they'll find a way. I'm still surprised they managed to find a way to use Tide detergent as currency to sell drugs).

http://nymag.com/news/features/tide-detergent-drugs-2013-1/

What point are you trying to make? Sounds an awful lot like the "Let's ban peer-to-peer filesharing, because it's used for copyright infringement" argument.

Nothing new. Any technology can be used for evil purposes. What matters is that more people use it for good than evil.