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Robinhood Markets Inc. raised more than $1 billion in emergency funds to help cope with the extraordinary trading and excitement in heavily-shorted stocks such as GameStop Corporation (NYSE: GME) and AMC Entertainment Holdings (NYSE: AMC).

The online trading platform used credit lines to strengthen its balance sheet and remove its restrictions in the trading of GameStop and other volatile stocks. It is popular among young traders including those who are informed about stocks through Reddit forums such as the r/WallStreetBets.

The Reddit-charged day traders ganged up together and helped propel the stock prices of GameStop, AMC, BlackBerry, and other companies. Billionaire Chamath Palihapitiya also contributed to the parabolic rise in the stock price of Gamestop.

In an interview with CNBC, Robinhood CEO Vlad Tenev denied that the company has a liquidity issue. He explained that the company tapped its credit lines to allow investors trade with fewer restrictions."

“By drawing on our credit lines which we do all the time as part of normal day-to-day operations, we get more capital that we can deposit with the clearinghouses and that will allow us to enable ideally more investing with fewer restrictions," said Tenev.

On Thursday, Robinhood temporarily restricted trading on GameStop and other heavily-shorted stocks to meet financial requirements such as clearinghouse deposits based on the volume of trades.

The company suffered a strong backlash from Reddit-charged day traders and U.S. lawmakers for its decision to freeze stock trading in GameStop and other companies.

In a statement late on Thursday, Robinhood explained, “We made a tough decision today to temporarily limit buying for certain securities. As a brokerage firm, we have many financial requirements, including SEC net capital obligations and clearinghouse deposits. Some of these requirements fluctuate based on volatility in the markets and can be substantial in the current environment.” 

On Friday, Robinhood resumed trading in the shares of GameStop and other companies. However, investors could only increase their GameStop position by five shares.  For other traders whose current positions in the stock exceed the limit, the company won’t force them to sell but they won’t be able to buy more.

Right now, there is a trading war between Reddit-charged day traders and short-sellers who are betting against GameStop. Short-sellers already lost billions of dollars from their bets against the company's stock.

The stock price of GameStop is up again by more than 67% to $325 per share on Friday.

Reasons behind Robinhood move

Since 2013, Robinhood has worked on making investing in stocks and other assets more accessible. However, the complicated process behind each trade made it harder for the company to control the growing number of trades. In return, customers felt betrayed by Robinhood’s decision to halt trading on Thursday — the company suggests that customers are not aware of the hurdles that the company is facing.