Robinhood chief executive, Vlad Tenev, said the 2021 GameStop trading halt was a wake-up call that exposed flaws in US market infrastructure and strengthened his belief that tokenisation could prevent similar disruptions.
Tenev said clearinghouse deposit rules tied to the former two-day settlement cycle forced Robinhood to halt buying during the surge in meme-stock trading, resulting in “massive deposit requirements, trading restrictions, and millions of unhappy customers”.
The comments revisit the January 2021 episode when retail traders from Reddit’s WallStreetBets forum sent GameStop shares soaring, prompting Robinhood to restrict purchases and triggering lawsuits, political backlash and a congressional hearing.
Tenev said the episode helped push US markets from T+2 to T+1 settlement, but argued that delays still stretch to several days around weekends and holidays, making real-time settlement through tokenisation a better solution.
Critics say infrastructure alone does not explain the failure, with experts arguing that other brokerages handled similar demand and that Robinhood lacked sufficient capital buffers and risk management.
“It is likely that Robinhood had not factored in capital reserves and risk management controls for such a high scale of interest,”
Said Musheer Ahmed, founder of FinStep Asia.
Regulatory limits remain, as recent guidance from the Securities and Exchange Commission reaffirmed that tokenised securities are still subject to existing settlement and collateral rules despite their blockchain-based format.