They have accounts. Every Bitcoin has a unique ID number.
People who bought Coinbase stock might lose all their money.
But, if your Bitcoins all have unique numbers, how can someone else spend them?
The same way you lose your money if you hold it in a bank and the bank goes belly up. You sign a contract when you join saying they can make you an unsecured creditor if you agree to use their services.
This is what the banks were before the FDIC. That’s where crypto is.