[Nursie]

>> Outside of Tether - I'm not seeing the ramifications

Total liquidity in the market is probably a very small fraction of the market cap. If Tether has been pumping in fake liquidity, in effect creating fake demand, there could be a relative demand crash as that leaves the market, and there would be a relative fall in the (apparent) availability of USD.

That would add to the effect of people desperately trying to flee tether to the comparative safety of real US dollars, which is likely to mean the tether/BTC, tether/ETH tether/whatever rates rocket as people try to get out of positions on tether exchanges. Then a fall in the coin prices as said folks transfer to other exchanges and try to cash out to dollars. And given there are now fewer dollars in circulation than was thought, it could be a bloodbath.

If other exchanges are above board in their dealings, and the coins and cash are where they should be, and withdrawals don't grind to a halt, then that could be as far as it goes. If they aren't, and if they have trouble paying out, it could take exchanges down.