I maintain that collateral is very liquid as it increases and decreases every single day and is a product of risk and volume. Collateral has two "outs" where on

I maintain that collateral is very liquid as it increases and decreases every single day and is a product of risk and volume. Collateral has two "outs" where one is simply reducing risk or waiting for risk to go away, and the other is to reduce the volume of the "hot" positions or liquidate those positions. Exchange-traded securities are categorically considered to be liquid, by themselves. Perhaps Robinhood's huge mistakes have made it more difficult for them to post collateral than if they had acted more trustworthy, but that doesn't change the situation surrounding collateral itself. The $3B collateral call was withdrawn just as quickly as it had been made - even better, since they raised $1B against what seems to be no collateral call. Robinhood actually had two ways of resolving the situation. One was to admit fault and either liquidate the underlying securities or have a portion of their clearing position liquidated, which would have resulted in the ability to return collateral and to be on the hook for the losses they caused for their customers. The other, was to restrict purchases on securities that either were thought to contribute to the VaR collateral assessment, or for which Robinhood's bookkeeping did not match between investor accounts and actual cash/security holdings. As it turns out, neither of these options was necessary according to the facts at hand - Robinhood's collateral call was withdrawn prior to Robinhood taking any action at all, and according to media sources in a Fortune article, no negotiation took place between the NSCC and Robinhood. So there must be another reason that Robinhood's books were not balanced. However, Robinhood used the second option anyway. This is the circumstance which has led to the WSB "conspiracy" theory that you discounted in other comments, which explores the idea that Robinhood is somehow involved, either willingly or not, in some type of market manipulation in conjunction with their payment-for-order-flow market maker, Citadel, who fills basically all of their orders for them. I'm not sure that "conspiracy" is the word to use when fines, penalties, and settlements for breaking securities law are commonplace among financial institutions, but that is just my opinion.