Do you have evidence that Citadel is RH’s prime brokerage? Being an executing broker or a trading counterparty or paying for order flow has nothing to do with being a prime brokerage or clearing RH’s trades.
I just re-read my comment and saying Citadel was Robinhood’s prime brokerage was definitely an error (too late to edit the comment now). I should’ve said market-maker.
Nonetheless, all the conflicts-of-interest between Citadel, Robinhood, and Melvin still stand. Citadel own Melvin, Citadel are market-makers for Robinhood, Citadel are members of the DTCC, Robinhood users cost Melvin billions, Citadel are footing the bill.
Worth noting that Robinhood is a member of the DTCC directly. As is Computershare.
You don’t need the connection to Citadel. If any member of DTCC blows up DTCC holds the bag. But all that means is all members of DTCC hold the bag, including the members holding the non-settled long positions because all public equities in the US trade through DTCC or one of its members.
Before that they used Apex.
This commenter seems disastrously uninformed about something they have very strident beliefs about.