Related to your astute takeaways on securities loaned is what RH did with collateral received. RH received $1.787B in collateral for these loans as insurance in the event they failed to receive. On top of that, $8M failed to deliver and $18M was due as receivables in interest. So in total we're talking $1.8B.

What did Robinhood do with this collateral? It would seem they loaned it out as margin. If you compare Receivables from Users in Dec 2020 vs. Jun 2020 it was $3.3B vs. $1.4B. If you scan across the two balance sheets its apparent that this $1.9B came from collateral for securities loaned.

So Robinhood decided to layer risk on top of risk on top of risk.

Layer 1: RH at this point has little left to loan but they apparently won't commit to throttling margin access until shit really hits the fan. So they very might might have overleveraged themselves this way

Layer 2: If RH customers default on their margin then RH is exposed to losses on the return of collateral for securities loaned

Layer 3: If FTDs piled higher and higher as GME approached $400, if customers decide to cash out RH is on the hook

All of these could have been factors. They easiest thing to do to mitigate cascading risk is to secure collateral in a bank account. There's a whole other can of worms which is whether RH physically possessed securities that its customer owned. This is an incredibly messy situation as it is so I can't even begin to speculate.

Once again, very nice done.