Users deposit coins on A. A figures they don't need to keep full reserves and can make more profit if they use some of those funds so A lends coins to B. B now owes A. B does the same and lends to C. C now owes B.
Market goes south and C can't pay B. B then can't pay A. So it collapses in reverse.
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Then the best way is to not trust A and we have an option, the keys offered by crypto is decentralized from the get-go. We make mistakes of convenience sometimes by saying its fee is higher, sometimes in the name of liquidity and what not. If even after having absolute control the users are having to trust A, then they themselves are falliable.
Definitely
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