Back when they allowed margin trading they needed liquidity to liquidate the bad debt of margin trades in the red. If they allowed other users to dump in front of them they'd lose money, so they denied service to others in order to dump in front of them.
This is sure not legal but also not illegal, that makes them the room to do so. Financial markets have been doing that for a long time. This is time for permission less DEXES. Thorswap is running again without ETH for now. I believe they will be able to tackle this once mainnet is launched. It's still early....
Thanks