While some people think "oh if you stole the money or involved in terrorism" the reality is: "if the government wants your money". These centralized companies behind all these currencies have to follow the law, so if government decides you are a bad guy, then they can freeze your assets just like they do at banks as well. So assume you have USDC at Coinbase, and government seizes your assets, they just mail Coinbase and tell them to freeze your account, and Coinbase will follow, as simple as that.
Do you think these countries are always fair? Like if we could have governments decide everything, they are always fair and great? Of course not, they are not, and they are sometimes doing shady stuff as well, so your money could be gone.
Exactly. You're never safe from governments' "evil hands". They can confiscate or even freeze access to your funds whenever they want to. Their efforts succeed when you leave everything in the hands of a custodian or third party. Centralized exchanges, centralized wallets, and spot ETFs are a huge no-go for me. Self-custody (non-custodial) would be the best way to protect your crypto from harms way.
I'd suggest you hold decentralized stablecoins for complete peace of mind. I'm talking about coins such as DAI, USDD, and USDJ. These have no freeze function implemented on their underlying code, unlike their centralized counterparts (USDC, USDT, etc). This is for the truly-paranoid. If you have nothing to hide or don't care about government oversight, then centralized stablecoins are for you. It's a "free market" (as in liberty), anyways.