Man that is awful ☹️.

In the light of this case there is an argument to be made in favour of custoding 5-20% of your Bitcoin with a Bank. You take the third party risk in order to mitigate the risk of theft/abduction/loss of keys. Although the risk of them losing your keys or screwing up in other ways is significant. And, they will whore out your data with whichever state actor declares himself worthy of your data.