Why I think that the alleged market manipulation by the owners of Bitfinex and Tether is not a bad thing

Anyone have the right to participate in the market. Even the owners of major infrastructure.

The best practical way for the owners of Bitfinex/Tether is to use their own systems. It is pain in the ass to open account in another exchange.

They, in theory, can open account at Bitstamp or any other major exchange. And do the same - buy massive amounts of BTC, because they believe it will be profitable.

There is no difference who is manipulating the market by buying large quantities of the traded asset. Market manipulation by buying is completely legal and is not morally wrong. No regulation prohibits the owner of the exchange (Bitfinex) and major infrastructure (Tether) from buying if he is buying it with his own money.

It's not wrong to print your own currency if it's backed by the underlying asset (USDT is backed by USD).

If they are operating fractional reserve in breach of their own Terms of Service and Whitepaper - this is illegal and morally wrong. However, there is no proof that they are using fractional reserve.

If their USDT tokens are backed with USD - it's not wrong to buy USDT to manipulate the market by buying large amounts of Bitcoin.

If every one is allowed to manipulate the market (by buying large amounts with "real" money backed by USD), why we should forbid the owners of Tether/Bitfinex to do it?

Buying bread from you own bakery is not questionable. If you are doing it like everyone else - you follow the same rules.

Why you should buy bread at another store if you have bakery?

However, because the lack of transparency and potential for them to be committing a massive fraud, I don't trust them. They maybe are honest, but how do I know?

It's a very fragile system. US agencies can hit them (steal their assets - like they did with BTC-E) at any time. They are very profitable target by the US agencies.

It's too easy for the US agencies to steal customer's funds - it's like stealing a candy from a baby.

Read how to margin buy or margin sell Bitcoin here.

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