How can the government discover I own BTC, let's say I'm from Venezuela where crypto is banned, what they can do to discover and arrest me?
Bitcoin transactions are anonymous. As long as you don't reveal your identity, no one know you are a bitcoin holder.
For this purpose you have to buy bitcoin peer to peer from a person you trust. Never use exchanges that force you to verify your identity.
And as long as youre not providing a Know Your Customers verifications ID you will be anonymous but not the transactions youre doing because it was traceable.
Only the bitcoin is what the government can trace but the identity of the owner will remain with anonymity unless their are conniving with the exchanges and wallet owner this is another stories