Some will always think Coinbase will rug any day. That aside, they use other custodians. Even if Coinbase goes down and they has 1/3 or 1/2 of the bitcoin there they will still have over 1% of the whole network.

Many need to recognize Coinbase (a US publicly traded company) is not mount gox

The biggest concern is them getting so big the government takes them over. I don’t think that will happen, but I would be more afraid of that than Coinbase pulling a FTX, especially after seeing what will happen if they do.