Shorting against isn’t illegal unless it’s to

Shorting against isn’t illegal unless it’s to avoid a taxable event, stop lying. You’re correct: “if for example they want to convert their instruments early.” They don’t convert or exercise before re they’re supposed to; they don’t need to. They have their basis baked into the warrants or conversion rate, and their short locks in the profit... price can move in any direction and their profit is assured, fixed, and the money free.