A criminal use is still a use. Some percent of gun sales are for criminal purposes. This counts as market demand just the same as any other sale. Precisely measuring how valuable this is to criminal enterprise is an interesting question.

My main area of skepticism regarding this proposed use case is that a blockchain is an immutable public ledger, and thus with enough sleuthing, it is probably quite traceable. Indeed many criminals have later been apprehended through monitoring bitcoin transactions.