After the surge in US video game retailer GameStop's shares, online trading platforms Robinhood and Interactive Brokers restricted trading on the shares on January 28.
The platforms had also restricted trading in the stocks of AMC Entertainment and Blackberry, which along with GameStop were reportedly topics of discussion on Reddit chat forum 'Wallstreetbets'.
After social media chatter, retail investors had caused a spike in GameStop's share price, causing losses for hedge funds such as Citron and Melvin Capital, who had shorted on the stock.
Robinhood later said it would permit limited trading of the restricted stocks on January 29.
"In order to protect the firm and protect our customers we had to limit buying in these stocks," Robinhood CEO Vlad Tenev told CNBC.
Also read: GameStop | How rookie investors beat seasoned counterparts at their own game
The "wallstreetbets" chat forum was briefly made private by the moderators on January 27 evening. The forum was also banned on Discord over violation of community guidelines.
Separately, Facebook took down a popular Wall Street discussion group called Robinhood Stock Traders, over violation of policies on "adult sexual exploitation".
Shares of GameStop, listed on the New York Stock Exchange, have risen 1,700 percent in around two weeks, Reuters reported. The stock closed at $193.6 on January 28, 44 percent lower than the previous close.
The US Securities and Exchange Commission said it is "aware of and actively monitoring" ongoing market volatility in options and equities markets.
United States Senator Elizabeth Warren, a Democrat, criticised the SEC for their failure to take action on what she called market manipulation.
"We need an SEC that has clear rules about market manipulation and then has the backbone to get in and enforce those rules," Warren told CNBC. "To have a healthy stock market, you've got to have a cop on the beat," she said.
Also read: India's small investors rush to join GameStop frenzy
US Representative Alexandria Ocasio-Cortez, a Democrat, slammed Robinhood's decision to restrict the trading of the shares, calling the move "unacceptable".
"This is unacceptable. We now need to know more about @RobinhoodApp’s decision to block retail investors from purchasing stock while hedge funds are freely able to trade the stock as they see fit. As a member of the Financial Services Cmte, I'd support a hearing if necessary," Ocasio-Cortez said in a tweet.
Some Wall Street analysts and firms also shared their concern about such movements in the US stock market.
"The unfortunate events in GameStop this week may be building a dangerous precedent for markets whereby retail investors act en masse to leverage their buying powers to spark fragility events," analysts at JP Morgan said in a note, as quoted by Reuters.
According to a CNBC report, the biggest beneficiary of the GameStop surge is Ryan Cohen, co-founder of Chewy, whose 13 percent stake in GameStop is now worth over $1 billion.
Cohen joined the GameStop board earlier in January, after which the stock witnessed a sharp upward move.