The exchange are doing so to protect their image too based on the government policies, I guess.
So, when they cease those coins, how sure are we that they will take it to the government?
We only assume, but we can't be too correct because we don't have internal access to the exchange. In cases where money which they don't trust is being deposited into an account either from a casino or mixer,
in most cases the best thing for the exchange to do for them to free themselves from being used as money laundering tools is to return the money back to the address which it was deposited from down to the exchange. This reminds me of the period when mixers were banned/closed-down by the Joe Biden administration, a colleague who mixed a few coins with Sinbad and transferred it to his Binance which later got locked. He was sent notification to provide information about the funds which still got confiscated at the end. That was how he got to abandon the account as it has been flagged to have been used to receive illegal funds which in real case was illegal but just because of the channel the funds was received.
The exchange didn't return the funds back to the address it came from, and I guess that's because it wasn't the best decision for them because they'll have to answer a lot questions from the authority about those funds movement in and out. So confiscating it for the government to take over, (from the experience of that issue) I think this will be the best option any casino can do to free themselves.