This can all boil down to a couple of simple questions

1.Has there been a bot active in AUR with a bias towards moving the price down?

2. How this this be accounted for apart from that party having a short position?

Odds are?
What are you basing these "odds" on?   "Odds" are a mathematical calculation. How did you decide what the "odds' were.

The point you missed before with yorur "accounting" argument is that...if AUR is being shorted everyone won't be able to withdraw their coins.

Lets say we deposit 100,000 AUR at an exchange. The market maker short sells 50,000 also

That means we should be able to withdraw 150,000 AUR..
But there is only 100,000 there

Yes, this is probably true. But this is the perfect environment for a short selling program.
If you watch the market you will see a bot actively pressuring the price down. It's not that hard to see.
But if you haven't even bothered to look and don't believe it then that's up to you . And if you did look then it begs the quesyion of why you sidestepped the points I made.
It's a bit naive to imagine that there aren't bots executing well known and well tested strategies in coin markets. But you are welcome to believe what you wish...even without looking at the evidence.
I gave you very specific information about what this bot is doing. But rather than examine the evidence you dismissed it prior to investigation.
Of course, if you follow the news at all you will see this is what has happened in other financial markets.
1.Experienced people noticed the activity of bots and saw something amiss.
2.They reported what they saw and were dismissed as paranoid.
3.years later regulators have egg on their faces.
 Peace

Either way...there is a computer program employing a strategy that only makes sense if they have already sold short.....
And that means that the crypto community is being shafted.

You might not consider that an issue worth raising but I do.
There are computer programs trading some coins in a way that very clearly indicates that have short sold...and it's not a level playing field

AUR just broke 0.0015. There has been a bot pushing the price down now for ages. They must be making quite a lot of BTC..if they are short. While the crypto community loses

Don't be silly. We have seen recently at Mt Gox, C-cex, Poloniex and Cryptorush that coins were stolen out of the hot wallets. If someone can steal coins from that pool of coins then a market maker can short sell them from there too

It works where there is one exchange that does most of the volume for a coin.

As I mentioned AUR could be a good example as most of the volume happens at 1 exchange. Same with Darkcoin. Most of the volume happens at 1 exchange. Both of these coins are active and popular enough for this strategy to work.
Asiacoin would be marginal at the moment.

For the last 20 years these types of strategies have been perfected. These outfits don't just randomly trade any old coin. They can with their computers analyse every market, and make "guesses" about where any one of dozens of different strategies might work.

If the circumstances suiting this strategy arise WRT Asia coin, the program will notice it.

There is no other reason that "bots" would deliberately try to force a price down. Pressuring a price down is what these programs have been designed to do when one is short....not at any other time.
So the obvious question is..why would a bot be trying to get the price down?

these trading systems are designed to be predatory...they examine all the data...they examine it in the light of what systems have been shown to work over many many hours of trading....then when the ducks line up they initiate the strategy.
If the exchange gives them the capacity to short sell 50,000 AUR...then you wont beat them...their pockets are too deep. They will win enough of the time

How it works IMHO.

1.The computer program identifies a situation where it is likely that there are more sellers than buyers or that there are more people wanting to sell then to buy. Programmers have been studying this stuff for at least 20 years, trying to work out strategies to take advantage of this.

2. Having identified such a situation, they take our coins from the hot wallet and sell some (knowing there are sellers around if they need to cover)

3. If someone else puts a sell order in the screen, they immediately jump in front and offer some coins. Then they often place lots of orders behind that for smaller amounts, trying to put pressure on sellers without risking too much.

4.Then they begin to tick small sales at lower prices. Again creating a fasle impression that there is selling around. And trying to put pressure on other sellers.

If their original "guess" is right (and they don't have to be right always), they continue these tactics, trying to tick sales lower, to never let anyone else be the best seller, and to sel more.

Lower down they put a buy order in, which often enough gets filled as real sellers decide it is too hard to try to be the best seller or to sell higher up.

This strategy is probably one of the most fool proof ones around if you have the exchange owners permission to take other peoples coins from the hot wallet. And they don't have to get it right all the time, just to make more than they lose.

There is no other market in the world where one participant would have such an enormous advantage. This is because in most markets they have to compete with others who also can short sell, but with smaller cryptos (not BTC) they can be the only ones who profit from a coin falling in price.

This really is the greatest scam of all........

I spent most of my working life trading professionally for banks or other financial institutions, and am very familiar with these strategies

I just don't like seeing the crypto community being taken for a ride.

Where is the best place to buy (or sell) darkcoin.
I am getting a bit sick of computerised trading programs jumping in front of me at CRYPTSY.

What other exchanges are good?

(snipping the irrelevant stuff where you try to big note yourself)  But how would you know? You don't have any relevant experience. Despite trying to constantly big note yourself
Again this shows you don't know what you are saying. This rule only relates to one market you have traded a little bit. There are dozens of stock markets around the world with different rules.

Yes...this practice will lead to problems at some point....but not worry you're an expert, and you have safely assured us based on your limited experience, and big noting,  that it can't be happening.

You have a some experience with shorting stocks, under one specific type of arrangement,where you have to borrow the stock, by way of a contract, and put up a margin.
What I am suggesting is very different.

1. We all deposit our AUR (as an example) with and exchange (or buy them there).
2.Some of these AUR are pooled into a hot wallet.
3. One player, the market maker, is allowed to sell those coins (our coins) on the promise he will buy them back.

It is not difficult as you suggest....but extremely easy for the market maker to short sell. He doesn't have to deal with all the red tape you have to when you short sell a stock. When you short sell a stock you have to deal with all the regulations  from the lawmakers, and the loan provider, and the one who loans the stock.

Here under my scenario the market maker just has to have a deal with the exchange. A deal you are never informed about and which you don't know the details of. Possibly a deal against your best interest and that makes more money for the exchange at your expense.

AUR was an hypothetical example. But its probably as good as any. Go and see the different AUR markets. How many of them are active. Probably only one.
Poloniex for example, which used to have half decent volume, now has  a very wide spread between buyer and seller. There is only one exchange really trading AUR in any size I think, though it is listed on many exchanges. So hypothetically that is a good example.

No...not all of them would have sold. Not everyone who has BTC in an exchange will sell on bad news. There would still be some left for the short seller to use.
So if the price is going down...the only person who makes money is the short seller.
No one else can make money. Because the price is falling

He is hoping to get more fees. Or he could be cutting a profit share deal.  No. But they do from what I know
Because most crypto players are small fish. Enormous amounts of money have been spent working out when it is most advantageous to sell short by people with very deep pockets. Now those methods are being used to trade coins.
What I'm suggesting is happening is this. They identify a weak coin, lets say AUR. They short sell AUR from the hot wallet, and all the way down short sell then when it falls, buy it back, then when the price pops up they sell again, then buy back when it falls.
This is how one makes money in a falling market...but....but... no one else can do this as they can't sell AUR short.

Everyone else has to buy first and then sell. But if the market is falling you still lose.

They can't.

Imagine though, if you were able to short sell any crypto coin. Do you think there would be times when the odds were so much in your favour that you make a profit by doing so?

Imagine say, as an obvious example, that the US government came out and said they were going to prosecute any person who used Bitcoin. You would probably make money if you short sold Bitcoin at that time.

Yes. Except we put the coins in. They aren't the "owners coins". Though perhaps in the fine print the owner might have said "if you transfer coins to my site then I own them......suckers"  

When we put our coins into an exchange, most of them should be stored offline in a "cold wallet", As they are offline they can't be stolen.
Some coins however are stored in a "hot" wallet, or an online wallet, where they can be quickly accessed for trading.

But in a hot wallet they are vulnerable to being stolen. Several exchanges have recently had coins stolen. These coins were stolen from the hot wallet, or online wallet. The ones in the cold wallet were safe.

Short selling is selling something you don't own (probably in the hope of buying it back cheaper). It is common in share markets. But selling from a hot wallet is very different. In a share market you arrange to borrow the shares, which means you enter into a contract with the custodian or owner of the shares. So if you have loaned the shares you cant sell them. But the owner or custodian knows this.

If an exchange is allowing one player to sell other peoples shares from the hot wallet, then there is no arrangement involving the actual owner. The "owner" doesn't even know the exchange is doing this.
So if the excahnge allowed someone to short sell from the hot wallet then, if enough people try to withdraw their shares the pool will run dry.
 

Another problem is that if people are short selling from the hot wallet, then eventually a circumstance will arise where not everybody will be able to withdraw their coins, because someone has short sold some coins 

Because one group, has the special privilege of being able to short sell from the hot wallet and all the rest don't have that privilege.

Isn't that an unlevel playing field?

It's happening in smaller crypto's more. In the BTC/USD market they don't have that much advantage (if any). That market is too active and more difficult for a bot.
But as mentioned, algorithmic trading has come a long way over the last 20 years. They know where the opportunities are, and trading BTC against the USD is unlikely to be one.
This strategy has been observed and written about. HFT firms in the stock market make the pretense they are adding liquidity, and most of the time their trading in larger stocks is marginal, but in less liquid stocks their tactics are more predatory

However as mentioned above also the time is probably happens with BTC is when some major negative news comes out. And that would mean it is not a level playing field..

One of the other problems is that if someone is short selling coins out of a hot wallet. then it means that potentially people will not be able to withdraw or sell their coins. Of course an exchange is unlikely to admit what has happened and will more than likely say they are doing an audit, or they are having technical problems and not to worry.