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Your story sounds invented to me to be honest, since you don't mention how the transaction was legally recorded. And the fact that it is in a place where Bitcoin is illegal makes it even stranger.
If I buy a house or land, I have to go to the notary and the property registry where it is documented that I acquired such property, for X money and that the form of payment is such.
Lately I have seen several stories of this style that talk about using Bitcoin as a means of payment and it gives me that at least some of them have more to do with trying to get merit than with a description of reality.
His story might not be a fabricated one but we can't totally trust people. In my country you don't need to mention how the payment was made before you legally register a landed property. All you need to do is to make the payments in whatever means you and the seller agreed and get a deed or conveyance prepared by a lawyer and the deal would be sealed. The surveyor and lawyer would do all the necessary government registration. The government might trace the payment transactions only if any of the parties is a suspect fraudster or corrupt practice.