Also if the “attack vector” is making only custodial Btc legal wouldn’t they want to prove it works well?

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I stick to the simple heuristic: not your keys, not your coins. Coinbase's keys, Coinbase's coins.

For sure, but even so.. this doesn’t tell us how they plan to attack with the 3M or so coins in institutional hands

I imagine the best way to get coins is to buy the entities that hold the coins