The thing is, what happens to all the BTC currently loaned ? TF doesn't have them. Will they ever be repaid back or will everyone just default on their loans ? (Were there actually that many customers to sustain CL's high interest rates or was it just a ponzi from the start ?)

If people pay back their loans, then there is not so much to worry about - just that it will take time to get all your coins back (ie bank run).
If not, TF is insolvent.