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The phrase "a crazy understatement" is correct and usable in written English.
It can be used to describe a situation where the reality is much more extreme or significant than what is being expressed.
Example: "Saying that the storm was just a little rain was a crazy understatement; it caused widespread flooding and destruction."
Alternatives: "a massive understatement" or "an absurd understatement".
Exact(1)
But then I noticed the movements of the model's face, and just as the accuracy of the technology set in, I realized that the term "electronic makeup" is a crazy understatement.
Similar(59)
It was a wild understatement.
Crazy is an understatement for the chain of events that Culkin's fame sparked.
In a bit of an understatement, Fieri said at the time: "It's been a really crazy story".
"Crazy is an understatement".
"I think crazy is an understatement, but that's the word I'm going to use right now".
A bit of an understatement.
That's a big understatement.
This was a colossal understatement.
That proved a serious understatement.
That is a considerable understatement.
More suggestions(1)
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Since I tried Ludwig back in 2017, I have been constantly using it in both editing and translation. Ever since, I suggest it to my translators at ProSciEditing.

Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com