The issue was between Robinhood and DTCC, and couldn't be resolved by having customers' settled cash because of the rules that forbid using the customers cash as collateral. Though it might have worked if it just slowed down buys enough.

I'm not tuned in enough to know the exact relationship between RH and DTCC.

I am tuned in enough to know there is a big difference between rolling up and asking for credit saying "Hey I've got X dollars in settled cash to buy Y. Please lend me some money." and saying "Hey I've lent out X dollars to buy Y. Please lend me some money."

Well the parent poster said they aren’t allowed to use that cash as collateral - if that’s the case, then not really?

If you don’t understand how the DTCC works, why are you trying to correct others?

I said I don't know the exact relationship between RH and DTCC because it isn't public. Why would they be asking the DTCC for credit? That is absurd on the face of what collateral is there for.

They can borrow money and use that for collateral which is exactly what they did. And there is a massive world of difference rolling up to a bank/investors saying "Hey I have settled funds, I need to borrow money to post as collateral" vs "Hey I lent people a bunch of money, I need to borrow a money to post collateral".