Was it a very niche brand of knife that is the nearly exclusive choice of criminals?
And don't confuse "nearly exclusive choice of criminals" with "only criminals choose it".
After all, cars are the nearly exclusive choice of bank robbers for getaways. But I don't think you are suggesting that every person driving in a car away from a bank should be documented and reported to the authorities.
I do think reporting every single BTC user to a three letter agency is pushing it though. I would understand doing that for accounts that raise red flags beyond simply using BTC, but doing that for every single one seems a bit paranoid and ineffective anyways.