Are cryptocurrencies a threat to anti-money laundering efforts?

Could you elaborate on why some individuals perceive cryptocurrencies as a potential threat to anti-money laundering efforts? Do the decentralized nature and anonymity of these digital currencies offer criminals a convenient way to conduct illicit activities? How do regulatory bodies and financial institutions aim to mitigate these risks while still fostering innovation in the crypto space? Is there a balance that can be struck between protecting the financial system and allowing for the growth of cryptocurrencies?