I asked about this question in another thread on the subject. Not being able to spend the Bitcoin directly, but exchanging it in exchanges, I doubted if the government would not order them to freeze those accounts as well. I simply see that it will cost them more work, but they will be able to make use of the money eventually:
...in Canada. They don't have complete jurisdiction all over the world.
They're only banned from selling the coins on centralized platforms like Kraken and Coinbase, but they're still totally free to move the funds around. Heck, then can even still sell the funds in a peer-to-peer manner if they chose to.
As for the tracking, there's a reason why CoinJoins and mixers exist, and why developers are still trying to work on making Bitcoin more private.
Even if it takes time and work, at least with Bitcoin there are ways to escape the clutches of the state.