GME trading in Robinhood

Robinhood restricts their users from buying GME stock.
There are couple of conspiracy theories explaining this restriction:

Conspiracy theory #1
Biden administration prohibits GME trading:
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https://stockhouse.com/companies/bullboard/lmnl/liminal-biosciences-inc?postid=32416027
One Reddit user, Odin19199, claiming to be an employee of Robinhood, stated that the company was pressured to halt GameStop trading by Sequoia Capital and the White House. These allegations have not been independently confirmed by Breaking911.

In the post, he alleges that he overheard that “Vladimir, yes founder Vladimir [Tenev], and the C-Suite, received calls from Sequoia Capital and the White House that pressured into closing trading on GME.”
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Conspiracy theory #2
Citadel (Robinhood's stock trading execution partner) wants to penalize GME - to suppress GME price - in order to help Melvin's fund with their GME short position:
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https://news.ycombinator.com/item?id=25945512
beachwood23
Robinhood doesn't actually execute any trades. They sell user's trade orders to Citadel, a trade executor. Citadel then buys the shares on the market, and sells them to Robinhood for a slight markup. It's how Robinhood offers trades for $0 fees. You pay pennies more per share, but don't have to spend $5 per trade.

Citadel, and other trade executors, are refusing to buy shares for retail traders. Coincidentally, Citadel also bailed out Melvin fund for their short position in GME. So, Citadel has an interest in not letting the price go up any further. And citadel controls trade execution for dozens of firms.

This is definitely illegal. But Citadel is betting that the resulting SEC fines from this illegal manipulation will be less than the loss they would get if they didn't suppress the price.
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Actual explanation
Robinhood restricts buying GME because Robinhood has problems with liquidity.
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https://news.ycombinator.com/item?id=25963215
karmicthreat
Because if RH were to collapse the clearing house would be left holding the bag. And clearing houses don't have that kind of money. So DTCC (the main clearing house) going under would stop pretty much all trading in the US.
So the clearing house requires 100% collateral for some stocks now instead of up to 5%. RH can't afford that and GME has been eating up 50% of RH daily trades.
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See also
CNN interviews Robinhood CEO
https://www.towleroad.com/2021/01/chris-cuomo-vlad-tenev/
Vlad Tenev claims that Robinhood has no liquidity problems.

When financial institution publicly claims that they have no liquidity problems - there is a good chance that this financial institution, actually, has liquidity problems.

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https://news.ycombinator.com/item?id=25962378
PragmaticPulp
Reading between the lines, they ran out of capital to post the required collateral for the trades.
They've been dancing around the subject because they don't want to trigger a bank run, but this is likely why they had to suddenly raise $1 billion and draw down their credit lines yesterday.

It appears they reached a point where they simply couldn't afford to support the buy orders on the volatile stocks any more. They likely had 2 options:

1) Shut down the entire platform until they could raise enough additional capital to post the required collateral. It's difficult to retain users and raise another round if you literally have to turn your service off on the hottest trading day every.

2) Shut down buy orders on the few stocks that were driving the capital requirements over the limit, at least allowing users to continue to sell.
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More explanation: Why Robinhood Disabled Buys but not Sells (Discussion on HN)