I don't understand why he would use an account to buy at a surplus rate and not use other accounts to sell at those rates. I.e. why not buy and sell from himself? That way he would not need to include fiat in the equation at all. Buying from his customers would mean having to produce fiat.
Well the fiat did not really exist. It was just numbers on users browsers. Once people started trying to actually withdraw these numbers is when the bank withdrawal issues and account freezes started happening. A lot of people could not withdraw for at least months before the final collapse, and were given various excuses throughout.