No it isn't. Bittrex has both a real USD pair and a TrueUSD (audited, US-based) pair. Binance has a TrueUSD pair.
> It is not trivial to be an active trader on Kraken who can freely move in an out of tether and USD.
Yes it is. I have a kraken account. I've traded Tether/USD plenty. I have no special privileges.
> Most of the holders of Tether don’t have access to a market to exchange for dollars.
Yes they do. See, first two answers.
> If you are wash trading, you are not giving up valuable dollars for questionable tethers, that’s the whole point of wash trading! Kraken could can just provide heavy discounts to the wash trader to minimize slippage to trading fees (which I think they do).
Ok, and this accomplishes what?
> Skeptics of the conspiracy, scam theory about tether basically use as their main argument a variation of yours: the bottom line being the market, as it is, believes Tether is not a scam, or the peg would simply not hold.
I'm not actually making that argument. The argument i'm making is that this 'wash trading' theory is stupid, because there is no reason to wash trade. The only entity that would have any interest in wash trading Tether is Kraken itself, to make the market appear more liquid, and attract real trading activity. But if that were the case, that has no bearing on the Tether-Bitfinex conspiracy theory and just isn't all that nefarious an activity.
Nobody has provided any compelling reason why anyone would be interested in falsifying trades on this Tether market. In the absence of any motive, i'm skeptical both that it's happening at all, and that if it is, it has any meaning whatsoever.
That being said, Tether itself may or may not still be a conspiracy. These things are unrelated in my mind. Though, on balance, I think I lean towards thinking it's not a conspiracy, though for other reasons than this.