Exchanges and hosted wallets already seize Bitcoin that is accused of being "tainted", here in AU.

Payment processors Western-world-wide are also noted for rejecting or seizing funds associated with disfavored causes and industries, without so much as a court order.

The USA may still allow some financial freedoms for a while, but for the rest of us on the wrong side of the Rainbow Curtain, its getting dark. 

 You can still self-custody, right? And accused by who of being tainted? Is the Australian government just monitoring all of it in and out of exchanges and custodial wallets? 

 Yup, and yup. They were paying others for the analysis, but from the ads I'm seeing they're building in-house mass financial surveilance too.

Bitcoin is fully-auditable and tracable. If you use it and one of your counterparties takes it to an exchange, the government can trivially find you. 

 hosted wallets have already started to censor transactions ? 

 I can only think of court-ordered cases off the top of my head, though