I want to move $20 million to my partner in crime overseas. I can't wire him $1 million without someone seeing that: what I can do, is send him 2000 laptops and charge him a dollar per laptop. He now has an invoice showing he's paid for these laptops, and he can sell the laptops at a reduced price to move them quickly and now has his $1 million. He has also now undercut every other laptop seller in his marketplace. This may put legitimate businesses out of business.
Same goes for any other business propped up by illegitimate funds. They compete with legitimate businesses without valid business models. Depending on the amount of laundering or the size of the community, it can do huge damage.
Doesn't sound like there would be any problem or disruption if moving the money in the first place was legal.
If it were legal, then we're no longer talking about money laundering.
If we're talking about should anyone be able to move their proceeds of crime without any observation, I explained why I disagreed with that. Do I agree with all the laws which they pursue it for? No.
If people are worried about the government cracking down on them, IMHO it's not through anti-money laundering (AML) legislation. They don't get enough information. The $10k reporting limit only applies to cash: wires are not reported. The other information they receive is if a set of transactions go through the bank's entire compliance department and the bank has considerable evidence to believe the transactions to actually be proceeds of a crime (drug dealing, bribery, tax evasion, whatever). Then they are sent to the regulator. This is a tiny fraction of transactions that go through: in the ballpark of 0.001%. The government sees these transactions and no others, unless they're conducting an investigation into a crime. This transaction monitoring process alone costs some banks up to $500 million a year, and they do not want to send through any more than they have to, because each one adds to that number.
FATCA is the government turning every foreign bank into a proxy for the IRS. IMHO that's the concerning legislation.
