Has a criminal organisation ever become a formal government?

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If you are talking about a criminal gang or a crime syndicate taking over a country and forming a government, I think that was not possible.

However, numerous cases exist where a country became a Mafia State.

According to Wikipedia -

- A mafia state is a state system where the government is tied to organized crime to the degree when government officials, the police, and/or the military become part of the criminal enterprise.

Also, there is something called Narco State.

- Narco-state (also narco-capitalism or narco-economy[a]) is a political and economic term applied to countries where all legitimate institutions become penetrated by the power and wealth of the illegal drug trade.

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One case that came near might have been the island of New Providence, the main island of the Bahamas. During the 17th century British settlement came under attack by French and Spanish navies and most settlers left, leaving the island mostly to pirates. In 1695, British Governor Nicolas Trott rebuilt the town and fort under the name of Nassau.

In 1703 and 1706, the fort was again attacked by the French and Spanish. It was destroyed and abandoned. From then on, the number of pirates was ever-increasing, and the number of "civilian" settlers dwindling. It gave rise to the term "Republlic of Pirates" and culminated in 1713 when Thomas Barrow declared himself Governor of New Providence.

It took until 1718 for the British government to send a new Governor. Woodes Rogers was able to re-establish his rule, and by 1720 was no longer challenged.

So while in the eleven years without a Governor on-site, the British formally maintained they were still in possession of the island, but de facto it was self-governed by the pirates, mostly without forming a formal government.

The other purported pirate's republic, Libertatia on the island of Madagascar, remains an account whose historical reality was never established.

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