The author of this article has fundamental misunderstandings about how markets work.

Let’s say their trading customers have 5,000 shares of the S&P that are long and 10,000 shares of the S&P that are short. The 5,000 longs and 5,000 of the shorts cancel each other out. If the market goes up, the longs make the money the shorts lose. Well, what happens to the extra 5,000 shorts? They’re losing money right? But there is no actual trade in the live market, so when the shorts close their positions at a loss, the broker pockets that money. Making a profit off the loss of their customer.

If there are 5,000 long and 10,000 short, yes, the 5,000 long and short cancel each other out, but the remaining 5,000 short BORROWED those shares from someone who is long. The brokerage isn't taking a long position of 5,000 shares against those shorts. That's simply not how it works.

There are cases where people didn't have to borrow the 5,000 shares to sell them at today's price in hope of buying back later at a lower price. That's called "naked shorting". There is no evidence that brokerages are naked shorting Bitcoin. If they did, and the market moved the wrong way, it means that they would become illiquid, because the brokerage would lose money on the trade directly.

I would take this article down asap.