[r_power_user]

I'm not quite sure I follow - in the event that Tether implodes, if you expect the long $1m BTC/USDT exposure to be worthless (assuming you lose the money you had on Binance, and Binance goes under), and your short BTC/USD exposure to make money (since it's a short position, you can only make 100% gain at maximum), doesn't that net out to zero PnL (-$1m loss in long BTC/USDT, and +1m gain in short BTC/USD)?

Unless I'm missing something in your math...

[kortilla]

The loss is in usdt, which is now worthless and easy to get 1 million units of to repay.

[sinsterizme]

I think because shorting futures is a leveraged position so max profit is more than 100%