1.  The government does not want to shut down bitcoin I don't know where you got that from. They approved 11 Bitcoin ETF's a couple days ago.

2.  Yes, you can buy on a KYC exchange and then transfer the funds to an address that the government cannot link you to. Use the bitcoin address of any non-custodial wallet of your choice. You will not get taxed until you move it from that Non-KYC wallet back to an exchange to sell.  That's the best way to go about it in your situation. Reporting anything stolen won't help you.