The post Robinhood CEO Says GameStop Incident Was a Wake-Up Call for Tokenization appeared on BitcoinEthereumNews.com. In brief Robinhood CEO Vlad Tenev says tokenizationThe post Robinhood CEO Says GameStop Incident Was a Wake-Up Call for Tokenization appeared on BitcoinEthereumNews.com. In brief Robinhood CEO Vlad Tenev says tokenization

Robinhood CEO Says GameStop Incident Was a Wake-Up Call for Tokenization

In brief

  • Robinhood CEO Vlad Tenev says tokenization could have prevented the 2021 GameStop trading halt, blaming outdated settlement infrastructure.
  • Experts say traditional brokerages handled similar surges, and Robinhood’s failure stemmed from inadequate capital reserves and risk management.
  • Recent SEC guidance states that tokenized assets still require the same collateral and settlement controls as traditional securities.

Five years after the GameStop trading frenzy rocked Wall Street, Robinhood CEO Vlad Tenev says the episode was a “wake-up call” that exposed deep flaws in U.S. market plumbing, and convinced him that tokenization may be the clearest path to preventing another such failure.

In a post on X, marking the January 2021 meme-stock crisis, Tenev said Robinhood and other brokerages were “forced to halt buying” of volatile stocks like GameStop due to clearinghouse deposit rules tied to the then-two-day settlement cycle. 

The result, he wrote, was “massive deposit requirements, trading restrictions, and millions of unhappy customers,” as outdated infrastructure collided with unprecedented retail trading volume.

The remarks revisit one of the most controversial moments in Robinhood’s history when, in late 2021, retail traders from Reddit’s r/WallStreetBets triggered a short squeeze in GameStop  stock (GME), sending its price from roughly $17 at the start of the year to an intraday high of $483.

Robinhood soon restricted purchases of GME and other meme stocks, triggering lawsuits, political backlash from lawmakers, and a high-profile House Financial Services Committee hearing, where Tenev apologized for the company’s handling of the crisis.

Tenev said Robinhood’s advocacy helped move U.S. stock settlement from T+2 to T+1, meaning trades now settle in one business day, but noted delays still stretch to T+3 or T+4 around weekends.

The remedy he advocates for is tokenization, which he says enables real-time settlement and freer trading, an approach Robinhood is already rolling out in Europe with plans for 24/7, DeFi-enabled stock tokens.

“It’s reasonable to say that clearing and settlement rules played a big role,” Robin Singh, CEO of crypto tax platform Koinly, told Decrypt. “While faster settlement could help reduce these stresses, tokenization doesn’t remove all market or regulatory challenges.”

But critics say the settlement bottleneck only partially explains what went wrong. While the T+2 clearing cycle amplified liquidity pressure during the surge, it did not affect all brokers equally, raising questions about whether Robinhood’s internal risk controls and capital planning were adequate for the scale of demand it faced.

Musheer Ahmed, founder and managing director of FinStep Asia, told Decrypt that traditional brokerages have previously handled similar surges in demand for stock without incident. 

“It is likely that Robinhood had not factored in capital reserves and risk management controls for such a high scale of interest,” he said.

“Irrespective of the scale and terms for collateral, the buck stops with the broker to be able to ensure smooth trading for their clients at all times,” Ahmed added. “If a firm is unable to keep up, then it is a lacuna that they need to work on and fix.”

Tokenization has been attracting growing interest, with top executives framing it as the next step in the financial evolution.

Tokenization of stocks can “potentially alleviate the collateral pressures,” Ahmed said,  if there are “appropriate smart contracts in place to source the collateral in real-time.”

Still, regulatory constraints loom as on Tuesday, SEC staff reiterated that tokenized securities remain subject to existing federal securities laws, meaning that blockchain format alone does not change an asset’s legal status.

“Without regulatory clarity, such efforts are moot,” Tenev wrote, saying collaboration with the SEC and CLARITY-driven tokenization standards could avoid another 2021-style shutdown.

Daily Debrief Newsletter

Start every day with the top news stories right now, plus original features, a podcast, videos and more.

Source: https://decrypt.co/356276/robinhood-ceo-gamestop-wake-up-call-tokenization

Disclaimer: The articles reposted on this site are sourced from public platforms and are provided for informational purposes only. They do not necessarily reflect the views of MEXC. All rights remain with the original authors. If you believe any content infringes on third-party rights, please contact service@support.mexc.com for removal. MEXC makes no guarantees regarding the accuracy, completeness, or timeliness of the content and is not responsible for any actions taken based on the information provided. The content does not constitute financial, legal, or other professional advice, nor should it be considered a recommendation or endorsement by MEXC.

You May Also Like

FCA komt in 2026 met aangepaste cryptoregels voor Britse markt

FCA komt in 2026 met aangepaste cryptoregels voor Britse markt

De Britse financiële waakhond, de FCA, komt in 2026 met nieuwe regels speciaal voor crypto bedrijven. Wat direct opvalt: de toezichthouder laat enkele klassieke financiële verplichtingen los om beter aan te sluiten op de snelle en grillige wereld van digitale activa. Tegelijkertijd wordt er extra nadruk gelegd op digitale beveiliging,... Het bericht FCA komt in 2026 met aangepaste cryptoregels voor Britse markt verscheen het eerst op Blockchain Stories.
Share
Coinstats2025/09/18 00:33
United States Building Permits Change dipped from previous -2.8% to -3.7% in August

United States Building Permits Change dipped from previous -2.8% to -3.7% in August

The post United States Building Permits Change dipped from previous -2.8% to -3.7% in August appeared on BitcoinEthereumNews.com. Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page. If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet. FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted. The author and FXStreet are not registered investment advisors and nothing in this article is intended…
Share
BitcoinEthereumNews2025/09/18 02:20
Pi Network Tech Upgrade Unlocks Mainnet Migration for 2.5 Million Users and Introduces Palm Print Security

Pi Network Tech Upgrade Unlocks Mainnet Migration for 2.5 Million Users and Introduces Palm Print Security

Pi Network has announced a major technological breakthrough that marks a new chapter in its evolution. According to information shared by Twitter user @strong3
Share
Hokanews2026/02/07 12:28