That is indeed possible however it is not illegal to use Bitcoin in the UK. If htey wanted to shut down these laws, it would already be illegal and they would probably quite easily be able to trace it.
lets imagine using bitcoin was made illegal, its not. so this is just hypothetical to appease Sir Alpha's thoughts
Yes exactly!
It isn't illegal already so it wouldn't become a target, otherwise it would already be illegal?
There is also already data records being stored for entities like the EU anyway so if it was illegal they would have already detected that problem.
Also, the UK government have done quite a considerable amount to endorce Bitcoin and have been fairly quick to outline laws for that, which I don't think they'll revoke.