The tether thing is less of a joke than you think. There is nothing preventing them to do exactly that. If you corner a BTC fanatic, they will often admit so themselves, but will claim it is no different than a central bank printing money or a regular bank doing fractional reserve banking.

There is plenty of circumstantial evidence that the tether supply is strongly correlated to BTC (https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3195066), and at this point you have to take it as a point of faith that all the tether in circulation truly comes from fiat deposits. On the regulatory side, crypto currencies are very much like going back to the days of Wild West finance, random hold-ups included.