Basically, because of the financial regulations, Robinhood has to put huge money on deposit to cover a percentage of the risk associated with the squeeze play, to cover the two days it takes for the trades to clear, and RobinHood, even with all of the extra bank loans, and additional investor financing, is still not big enough to handle the deposit volume. Robinhood was forced, and likely will be forced again, to halt trading on it's platform just try to cover the required deposits. This may also explain why Robinhood resorted to extreme (and probably illegal,) measures to find more money by running roughshod over it's own clients accounts. RobinHood was also squeezed, only in a different way. That's will probably be the basis of their defense in court. The regs made them do it. Choose between the government who can put you in prison and close the firm, or the clients who can sue you in court for damages later on.