One problem with their business model is that we may be on the cusp of an enormous backlash against HFT in traditional markets which will probably spread to crypto's
http://www.zerohedge.com/news/2014-04-20/obituary-high-frequency-trading-adaptive-genius-rigged-markets

Though as there is a strong lack of visibility into crypto exchanges that might not worry them

Your coins inside an exchange are entirely fungible. If you withdraw coins do you really think you get the same coins back.   Bitcoins as a currency are fungible.
Why do you think there was such a big issue with the recent USA tax interpretation, that indicated Bitcoins were to be treated as property?
Because this made them non-fungible for tax purposes.
Fungibility has everything to do with short selling, because you don't buy back the exact same coins or stocks or metal that you sell. You don't get the same dollar out of the bank that you deposit.

I'm going to put you on ignore friend, as this is becoming a waste of time.

So, has anyone heard anything at all from the developers?

No you are wrong. When you borrow a stock to sell it short you have title to the stock. You may not know this as all you have been doing is executing the sale. A whole lot more is happening in the back office of the organization you are dealing with.
You may think you "know it well', but you're only familiar with what is happening on the surface, not in the back office, where things are reconciled.

Now, large firms may not follow this procedure as, for them, but not for you, it has been a grey area legally. And depending which country you are in the regulators may not have caught up fully yet. though it's been a big area of focus the last few years.

But..without digressing too much, this is different to crypto currencies because of the nature of them. By the nature of the blockchain itself.
But in short, when you deposit your coins with an exchange (or most anyway), they can pretty much do what they like with them. Some go into eh hot wallet. They are no longer yours. this is why "hackers" (not really hackers) were able to to steal coins from several exchanges, out of the "hot wallets".

As the coins are entirely fungible, you just get an equal amount of coins back if you withdraw.

Now because, you as the "owner" of the coins have never entered into a loan agreement, you imagine you still own your coins and can sell them at will. But you can't necessarily. You are relying on a "trusted third party" to not stuff things up.
If the exchange loaned out coins, which were then shortsold then obviously everyone cant sell or withdraw their coins.
But that, my friend, is just one of the problems.
This is a market manipulators dream  
Imagine being the only person or organisation who was able to short sell a particular crypto currency. Bad news comes out and you have no competition. Everyone one else is either long or square.

And yes, I have probably done hundreds of thousands of short sales, as I have worked professionally in that business for many years. I'm very familiar with market making, short selling etc...

What I'm concerned about is exchanges and trading firms destroying and profiting from what I think is a tremendous community based project. I don't think they really have the crypto community at heart most of the time

Added in edit: I should have added that the gold market in the west is a notable exception where shorting is concerned, but that is hardly a model that should be emulated.

It's fine if there is a level playing field. What I'm suggesting is there is not one.
Secondly I'm sure you can imagine the potential problems if title is not granted when coins are short sold..
  I don't know. Do you think they will tell you if they are letting people sell your coins?
I'm suggesting it is happening because there is no rational for bots to keep pressuring prices down unless they are short. The way these bots are operating (at times) is the same MO as bots that are designed to see how low they can get the price of this or that financial instrument.
You just have watch the price action.
If you offer to sell they immediately jump in front. I you buy the price up a little, they immediately (and I mean immediately) tick the price down lower. They fill the screen with tiny sell orders. They continually sell small amounts as low as they can.

There is only one strategy this type of algorithm fits. Its the way computer trading systems are programmed to act when they are short. Not at any other time.

I understand how it works. though I'm not sure you are too familiar with it.
Normally the short seller will have to gain title to the instrument before they can short sell.
Obviously this would not be the case on crypto exchanges.  This is a HUGE difference. Do you understand that?
What I am concerned about is back door deals done by exchanges which allow certain participants to short sell using algorithmic trading systems.
Most people trading on crypto exchanges are "small fis" so it's quite easy for someone with deeper pockets to manipulate the markets.

It's a little naive to think these guys are helping you or even neutral participants.

Banks are your friend too. Just ask them. 
I;ve never seen anyone claim a practice was good and fair because it's just like a bank. 

No I never claimed this[/quote] You'll have to reword this it makes no sense No, you are still not getting it. I never said the exchange sells anything.

. Did I say it was new? Like I said, no one would randomly short sell anything. Bad news comes out, they can short sell but you cant. They win and the holders lose.

If you don't mind exchanges allowing other people to sell your bitcoins, then good for you. Do you really think it is Ok for an exchange to let someone else sell your Bitcoins?

Not everyone who bought BTC at $1200 USD has the luxury of being able to hold it. Most ordinary people, at some point have to sell. If you have so much money that you never have to sell, but can sit on losing positions for years if necessary, then you are part of a small minority

What is finally coming to light, following the release of Michael Lewis's latest book is that algorithmic traders aren't your friend. They never intend to add liquidity. They are predators

True....but algorithmic trading is quite mature now. They don't do it all the time. They have studied markets in depth for years, they know when to act.
So when China makes a negative statement about BTC....they can laugh and sell short. All the BTC  holders lose, and they win.

The only proof I have so far , and I can quote the ASX release when i get back to work (as these disclosures don't seem to be on the website), is that DigitalBtC had to disclose their business practices, which included short selling bitcoin and others coins. So I'd say they must be doing it from the hot wallet with the blessing of the exchange.
The thing that made me think about it was watching a bot pressure down the price of a coin. There is no rationale to design a program that does that unless you are "short". You don't design a program to push the price down if you are a holder.

As we have seen recently in the press with the release of Michael Lewis's new book, greedy exchanges are all too willing to accommodate predatory trading firms, and with cryptos being unregulated we should expect the same greediness and feigned naivety

Perhaps the biggest scam of all; happening every day, is exchanges allowing "market makers" to sell you coins in the hope of buying them back cheaper. If a value of a coin falls hundreds maybe thousands of people in the community lose, but one or a small handful make money.

Exchange owners  allow "market makers", special privileges on their sites. These would include small or no fees and the ability to sell your coins out of the "hot wallet", hoping to buy them back cheaper..
 There are at least 6 of these market making operations globally, who enjoy these special privileges. This came to light if it wasn't known before when an bitcoin company made a back door listing on the Australian Securities exchange. As a listing requirement they had to disclose the particulars of their business which included short selling crypto currencies.3. Exchange owners win, market making firms win, and the community loses.

You will see thins in various markets where "bots", computer trading systems try to drive down the price after already having sold short coins from the "hot wallet".

If this is not in our interest we need to stand up to them

I'm new around here, so thank you.

True...here is a question for you all.  Larger exchanges allow "market makers" in. They allow trading firms to "make markets". They probably give them a good deal on fees.
Is it possible that they would allow these firms to sell short, using other peoples coins that were held in the hot wallet?

A Darkcoin clone with a different distribution may do better.

As a Darkcoin holder, I'd like to hear all points of view.

If the large holders are keeping their coins in exchanges , then it probably means they want to be able to sell them.
How much of the large holdings are in exchanges