There is a more manipulation scene that exists in exchanges where they will liquidate your positions by either freezing the accounts temporarily or moving the market in the direction to hit the stop losses.
Unfortunately we have very few good CEXs which have more liquidity and those CEX exchanges are taking advantage of this and making a lot of money by manipulations.
exchanges dont 'freeze' accounts at a whim. because people can sue businesses that breach certain standards.
yes they can put temporary 'server overload' or 'down for maintenance' pages up but they cant freeze an account at a whim temporarily without reason
as for manipulating. well thats insider trading, which come with investigations and fines. which is why they wont do it for silly small amounts of only a few customers balance level. it would need to be whole market value amounts to make the risk of fine be worth the possible profit.
it was easily possible 10 years ago to play the markets but these days, they earn enough just servicing customers to not need to also be angering the customers by stopping customers.
yes they can arbitrage in their reserves to other exchanges miliseconds before a customer on their market causes a spike or crash. but they cant just play around with your own customers on their own market
EG exchange A sees a potential $1k spike/dip on exchange A by a customer, so exchange A uses its reserves on exchange B to copy that order in milliseconds, thus making exchange B mimic exchange A. (before exchange A's customer order fills to then have that customer to then arbitrage to exchange B for a double sweep)
however exchange A cannot just halt an order of a couple customers repeatedly in exchange A without it causing a few flags of its own oversight popping up which can trigger exchange being investigated for insider trading