Can I cash out Bitcoin without proof of provenance? I have around 25 BTC from back when Bitcoin was around 10$ or lower. At the time, a friend sent them to me and I never thought they would ever be worth much. Since that time, I've moved them around and don't think I still have any original wallet from around that time. I don't have any solid proof of the original transaction (maybe some old Skype chat log). I'm worried that if I tried to cash them out and withdraw to my bank account, I will lose all or worse.

From what I understand, if the government decides to investigate the transaction, they could seize it and put me in jail? The burden of proof is on me right? What's the best/worse case scenario? Any suggestion on how to approach this?

A general answer would be nice but to be specific, I'd be cashing out to either my USA or Canadian bank account.
In the US, nobody is likely to care if you assume a zero basis and pay capital gains tax on the full value of the bitcoins. If anyone asks, just explain that you acquired them back when they were nearly worthless. There are a lot of people in that same situation.