How likely is this cascade to reach Binance?
The fact that crypto severely and relatively quickly punishes bad custodians who fractionally reserve and trade customer funds is a feature not a bug. And the reason this punishment happens quickly to crush bad actors is the "bank runs" necessary to trigger the event can occur within minutes of rumors or information being revealed to the market, and assets can be withdrawn globally very quickly. No other "banks" or exchanges or brokers are exposed to this much pressure punishing insider schemes like this.
Even the gold and silver markets have a lot of people claiming there is paper leverage way in excess of physical supply, and that large geopolitical interests suppress the price of gold so as to defend against it taking value from sovereign debt and currencies. I think there is some truth to this, but the reason it is allowed to persist and that there may not be true "price discovery" in gold and other commodity markets is that no one takes delivery, and so many simply leave their physical asset on custodian banks. Who knows what they are doing with this, or if their asset is truly allocated. It would require a crypto style "bank run" to punish these potential bad actors. Only crypto has this over and over again at scale.
Presumably someone will make a new one; it seems unlikely to me that all crypto will go to zero in the near to mid future, even assuming what you say.
That's not really true though, is it? The value of those coins is directly tied to the existence and function of (enough) exchanges to facilitate their use. Enough exchanges fold, and your coins won't be worth the bits they're taking up.
In some sense, it has already reached Binance. The real question is whether or not Binance has enough funds to weather that kind of storm.
The only thing that can unravel Binance and Tether is a big enough bank run.
The majority of the people answered 'binance'.