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.
But there are any case thay your IP Address can detect? How do you withdraw it if it is banned on your country? It is able in another country so you need some person to handle your coin in another county to get it.
I also think like that if you can do bitcoin if it is banned but I think they banned some paying bitcoin not using bitcoin or earning bitcoin on one person but it is hard to get.