Given the market is unregulated, I would question if the exchanges have enough fiat to pay out everyone. I would say for most that it would be very unlikely.

Although you could argue that the same exists for banks. If everyone went to ATM's or bank branches at the same time and withdrew their savings in cash paper notes, there wouldn't be enough and the banks would be insolvent. Something slightly similar happened to Greece a few years back as part of Grexit, where Greeks were restricted to withdrawing something like $200 euros a day from their accounts, as there was concerns the country would leave the eurozone and have to start their own (less valuable) currency.