The money is yours and no government can confiscate it.
Anyone can confiscate it.
Let's say the Government wants your cryptocurrency. You rub your hands together with an evil laugh and say it's protected by a private key that you've memorized!
They put you in jail and say you can come out when you hand over the keys to your cryptocurrency.
Or it could just be a random person with a plumbing wrench that will happily stop hitting you in the head with it if you give up your private key. Or it could be someone that breaks into your house and steals your wallet's recovery phrase. Or it could be you accidentally sending ETH to a BTC wallet.