According to the most recent Short Interest Reporting dated February 9, cryptocurrency bank Silvergate Capital Corp. is the second shortest company in the United States, with almost 72.5% of its shares short. This information was collected from the market on February 9.

The Financial Industry Regulatory Authority (FINRA) is responsible for the collection and publication of short interest positions for all equity securities twice a month. When investors and traders take a short position, it indicates that they anticipate a drop in the price of a particular asset, such as a stock. A short seller is someone who bets that the price of a security will fall.

As of this writing, Silvergate (SI) shares had fallen more than 87% over the course of the previous year. Silvergate’s latest financial report, as well as the legal fights the company is now embroiled in over its ties to defunct companies FTX and Alameda Research, have contributed to the downbeat outlook for the stock.

The bank made the announcement on January 17 that common shareholders would be responsible for a $1 billion net loss in the fourth quarter of 2022. According to a report published by the United States Securities and Exchange Commission (SEC) , Silvergate experienced significant deposit withdrawal losses during the period. As a result, the company was forced to seek financing from wholesale sources and sell debt securities to maintain its liquidity.

It has been claimed that Silvergate took out a $3.6 billion loan from the Federal System of Home Loan Banks in the United States to minimize the fallout from a spike in withdrawals that occurred after cryptocurrency exchange FTX shut down in November.

The bank is being investigated and sued in the United States for allegedly assisting FTX in its fraudulent operations, which include lending to users and mixing their cash. The corporation is being accused of “promoting the FTX investment scam,” and shareholders claim Silvergate violated the Securities Exchange Act of 1934. The Justice Department is now conducting an examination of the bank’s involvement in the FTX companies.

According to Silvergate, Alameda signed a banking relationship with the institution in 2018, before the launch of FTX. According to the company’s statements, due diligence was carried out at the time and there was also continuous monitoring of the issue.

Moody’s Investors Service recently downgraded Silvergate Capital and its bank to “junk” in response to the bank’s trouble, with a negative outlook for both entities.