Crypto manipulation of the market is legal which is the big risk on this industry because it is a decentralized system not like the stock exchange. No one control the crypto market that is why any company, individual with wealth that can invest huge amount or group of people can possibly manipulate to inflate and diflate the price of market at anytime.
I think you are misusing the term legal here. Manipulation is "legal" only as far as the whole market is not regulated and not downright illegal. In other words, it is mostly in a gray area of sorts, where the notions of legality are not fully applicable as such. Here, everything is kind of legal which is not declared as outright illegal by whoever has control over the market.
Besides, manipulation is prospering and thriving even on regulated markets as gray areas exist there too. And sometimes, even the biggest exchanges like CME get caught with shady practices like front-running the orders of their clients, insiders trading, cornering, and doing a lot of other things most of us have never heard of.