This. Specifically, it's worth noting that Madoff's scheme collapsed in the 2008 financial crisis when people were asking to pull money out of the fund. IOW it worked as long as Madoff could convince more and more people to put money in. When he could no longer make the redemptions, he was caught:

> For years, Madoff had simply deposited investors' money in his business account at JPMorganChase and withdrew money from that account when they requested redemptions. He had scraped together just enough money to make a redemption payment on November 19. However, despite cash infusions from several longtime investors, by the week after Thanksgiving it was apparent that there was not enough money to even begin to meet the remaining requests. His Chase account had over $5.5 billion in mid-2008, but by late November was down to $234 million, a fraction of the outstanding redemptions. On December 3, he told longtime assistant Frank DiPascali, who had overseen the fraudulent advisory business, that he was finished. On December 9, he told his brother about the fraud.

https://en.wikipedia.org/wiki/Bernie_Madoff

Madoff's scheme persisted because nobody knew about it. People have been writing articles claiming Tether is a fraud for many years now. The price even dipped a few times as a result. But then it went right back up. There's a reason for that, of course. And that reason is that arbitrageurs are arbitraging, because they can simply withdraw to USD.

> I'm going to screenshot this comment by the way for r/agedlikemilk :)

I'll be waiting :)