That's a strange argument to make. These money-laundering fueled asset bubbles are caused because money-laundering is illegal? So if we make money laundering legal, then the dirty money will be spread out across all economies rather than concentrated where oversight is weakest?
The whole point of money laundering laws is that you make it difficult for criminals to use the profits from crime. If you remove that barrier, you've instantly made it far more lucrative to commit the underlying crimes. Secondly, tracking the money is how a lot of organized crime is uncovered in the first place. Removing financial controls would make it far more difficult to catch corruption, fraud, terrorism, human-trafficking, etc. committed by international criminal organizations.
It may be a game of whack-a-mole trying to prevent loopholes where criminals can launder their ill-gotten gains. But to do nothing would be far worse.
The whole point of money laundering laws is that you make it difficult for criminals to use the profits from crime. If you remove that barrier, you've instantly made it far more lucrative to commit the underlying crimes. Secondly, tracking the money is how a lot of organized crime is uncovered in the first place. Removing financial controls would make it far more difficult to catch corruption, fraud, terrorism, human-trafficking, etc. committed by international criminal organizations.
It may be a game of whack-a-mole trying to prevent loopholes where criminals can launder their ill-gotten gains. But to do nothing would be far worse.