Aren't you comparing the wrong values. Those banks that failed had more assets than tether has liabilities.

However, the actual difference between assets and liabilities was significantly less than 120bn for those banks. With Tether, I imagine the collapse will go from 1:1 redemptions day 1 to "oops all gone" day 2.

So I expect Tether to be the largest "bank" failure in US history by terms of loss of value.