Yes, because it is a currency that cannot be tracked, which is anonymous and perfect for illegal activities.
Bitcoin transactions can be tracked by all people if they so wish. The blockchain is open for everyone to browse through.
If you for example buy yourself 1BTC from an exchange, and you withdraw it to your wallet, and spend it afterwards, the exchange where you verified yourself with your personal information, linked your information to that 1BTC.
While you have got the impression that you are anonymously buying weapons or drugs with that 1BTC, the exchange in question knows exactly where your coins are going
If the government forces your exchange to release all your information and logs, then the exchange will kindly cooperate and supply the government with everything they need.