Maybe they thought it was laundered well enough and were waiting to cash it out.
Government wil always cook up a reason to justify whatever action they're taking, it doesn't matter whether it's true or not.
If i would have millions in crypto, frankly i would see Coinbase as excellent centralized option. It would be way safer then anything i could provide, and i wouldn't need to lose any sleep over losing my private key.
I believe that was the same thing our guy, the victim, thought too that his finances would be already keeping that in a Coinbase. Unfortunately, that didn't play out in his best interest. I, for one, won't dare keep such a huge fund in a Cex. Never.