Prop Firms Blacklist 2026
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Prop trading scams:
My Forex Funds – CFTC alleged fraud related to simulated trading, disclosures, and payout practices.
The Funded Trader – Faced widespread complaints about delayed payouts and frozen trader accounts.
Skilled Funded Trader – Reportedly suspended payouts and restricted account access before shutting down.
FundedFirm – Accused of misleading payout claims and questionable marketing practices.
Topstep – Faced allegations that program rules made trader payouts difficult to obtain.
BluFX – Drew criticism over business model changes and account funding restrictions.
Funded Academy – Traders reported payout disputes, rule changes, and account limitations.
True Forex Funds – Experienced operational disruptions and trader complaints regarding payouts.
Prop trading is a form of cooperation between companies and private traders, the meaning of which is that the trading firm provides its partners with financial capital for trading, and they, in turn, share a percentage of profits with the company. At first glance it seems that there are no risks for traders, as they do not invest their own money, but in reality everything is much more complicated than it seems at first glance.
In this article, we will analyze what fraud schemes are common in this type of activity, as well as what signals indicate that you have contacted scammers.
Prop scamming format - is the work of a financial organization in which partners manage capital on a profit-sharing basis. It is because of this wording that traders are convinced that there are no risks for them, as in this case they do not invest their own funds. However, in reality, there are always chances to run into fraudsters who successfully disguise themselves as legitimate proprietary firms. Swindlers use various schemes - from a fake terminal for manipulating transactions to paid training.
Risk warning: Proprietary trading involves substantial financial risk. Using firm capital can lead to gains or losses, and failure to meet targets may result in account closure. Over 85% of prop traders do not achieve long-term profitability. Understand the risks and seek professional guidance.
Prop trading scams 2026
The proprietary trading industry has expanded rapidly in recent years, attracting thousands of traders with promises of funded accounts, profit-sharing opportunities, and low-cost entry into financial markets. While many prop firms operate legitimate evaluation programs, the sector has also faced growing criticism over payout disputes, hidden restrictions, account terminations, misleading marketing practices, and questionable business models.
Several high-profile prop firms have become the subject of regulatory investigations, lawsuits, trader complaints, or major operational controversie. These cases have raised concerns about transparency, payout reliability, and whether some firms generate most of their revenue from evaluation fees rather than successful trader performance.
The following cases highlight some of the most widely discussed prop trading controversies and scam-related allegations reported across the industry in recent years.
| Firm / Case | Year | Main Allegations or Issues |
|---|---|---|
My Forex Funds | 2023-2025 | CFTC fraud allegations involving simulated trading disclosures, payout practices, and business operations. |
The Funded Trader | 2024 | Large-scale payout delays, account freezes, and trader complaints following operational collapse. |
Skilled Funded Trader | 2024 | Reported shutdown issues, suspended payouts, and trader access restrictions. |
FundedFirm | 2024 | Allegations of misleading payout statistics, cloned website elements, and questionable marketing practices. |
Topstep | 2026 | Topstep alleging deceptive program rules and practices that allegedly made trader payouts difficult to obtain. |
BluFX | 2023-2024 | Business model concerns, operational changes, and trader complaints regarding account access and funding conditions. |
Funded Academy | 2023 | Complaints involving payout disputes, changing rules, and account restrictions. |
True Forex Funds | 2024-2025 | Operational disruptions, payout concerns, and trader complaints after platform difficulties. |
My Forex Funds (2023–2025)
My Forex Funds became one of the most widely discussed prop trading cases after the U.S. Commodity Futures Trading Commission (CFTC) accused the company of operating a fraudulent scheme involving simulated funded accounts. Regulators alleged that the firm generated most of its revenue from challenge fees rather than trader success and that only a small percentage of participants ever received payouts. The case sparked broader industry discussions about transparency, simulated trading disclosures, and the sustainability of evaluation-based prop firm business models.
The Funded Trader (2024)
The Funded Trader faced significant controversy after experiencing operational difficulties that reportedly led to payout delays, suspended withdrawals, and restricted account access for many users. Numerous traders claimed they were unable to receive profits despite meeting program requirements. The incident raised concerns about liquidity management, financial stability, and the ability of some prop firms to meet payout obligations during periods of rapid growth.
Skilled Funded Trader (2024)
Skilled Funded Trader became the subject of trader complaints after reports of service interruptions, payout issues, and difficulties accessing funded accounts. Following operational disruptions, many users expressed concerns about the firm's ability to continue normal operations. The case highlighted the risks associated with newer prop firms that may lack sufficient financial resources or infrastructure to support large trader bases.
FundedFirm (2024)
FundedFirm attracted industry attention after allegations surfaced regarding marketing practices, payout claims, and platform operations. Critics questioned the accuracy of publicly reported payout statistics and raised concerns about business transparency. Although not all allegations were proven, the controversy underscored the importance of independently verifying performance claims promoted by prop trading firms.
Topstep (2026)
In 2026, a trader filed a lawsuit against Topstep alleging that certain program rules and operational practices made it difficult for participants to qualify for payouts. The case drew attention because Topstep is one of the longest-established names in the futures prop trading industry. While the allegations remain subject to legal proceedings, the lawsuit renewed discussions about evaluation requirements, payout eligibility criteria, and transparency within funded trader programs.
BluFX (2023–2024)
BluFX faced criticism after major changes to its business model affected trader access to funded accounts and account progression opportunities. Some users reported confusion regarding revised program terms and account restrictions. Although the firm did not face major regulatory fraud charges, the controversy demonstrated how sudden policy changes can negatively impact traders who rely on long-term funding programs.
Funded Academy (2023)
Funded Academy received criticism from traders who reported payout disputes, account restrictions, and concerns about changing program requirements. Complaints centered on the firm's handling of successful traders and the consistency of its payout processes. The case became an example frequently cited by traders when discussing the importance of carefully reviewing a prop firm's rules before purchasing evaluations.
True Forex Funds (2024–2025)
True Forex Funds encountered operational and regulatory challenges that led to service disruptions and uncertainty among traders. Reports of payout concerns and restricted platform access generated significant discussion within the prop trading community. The situation highlighted how regulatory issues affecting a firm's infrastructure can directly impact traders, even when they have successfully completed evaluation programs.
Scammers in Prop trading: who are they?
At first glance, it may seem that there is no room for deception in proprietary trading, as in this case it is only the company that risks its funds, not the partners. Although a firm's activity in the field of proprietary trading does not automatically make it fraudulent, unfortunately, the chances of encountering swindlers are quite high.
Fraudsters only pretend to be bona fide companies, using various schemes of deception - from trivial phishing links to steal personal data to fake trading terminals, with the help of which they manipulate transactions, so that they can then announce to an unsuspecting trader a fine for failure to fulfill the terms of the contract. Also, one of the most obvious schemes is refusal to withdraw funds. The user expects to receive a deserved part of the profit, but in the end receives only a blocked account. In addition, fraudulent pro-payment companies may impose such requirements for evaluation that are simply impossible to fulfill.
To establish their reputation as a trustworthy company, prop firms attribute non-existent merits to themselves and forge licenses, as well as massively publish custom reviews on forums. Experts will discuss other signs of unscrupulous firms in the next section.
Top signs you might be dealing with a prop scam
Now let's see what signs indicate that you have stumbled upon a scammer who is only interested in his own profit:
A vague profit-sharing structure. A legitimate proprietary firm has a clear and structured profit sharing agreement. If you don't see this clause on the firm's website, or if managers avoid specifics during face-to-face conversations, it's best to keep looking.
Overly tempting promises. Scammers like to make promises to traders about potential profits that are almost unrealistic, so be skeptical of prop firms that offer you quick and easy money.
Presence of hidden fees. Often in the course of cooperation with fake prop companies, they "pop up" some additional fees that were not mentioned earlier. For example, some taxes or account maintenance debts need to be repaid.
Haste. Scammers prefer to rush their victims to keep them off the hook. If managers are too persistent and do not leave you time for long thoughts, then something is clearly wrong here.
Negative feedback. The first thing to do before starting a cooperation is to familiarize yourself with the reviews about the company. If the vast majority of comments are negative, then you won't be able to make money here.
What fraudulent schemes are most used by prop scammers?
Method | Description |
|---|---|
Before entrusting traders with capital for management, proprietary firms organize competitive selections and this is quite logical. However, if a company asks a trader to open a real account and deposit his own money, it is a clear sign of fraud. At the same time, fake prop-firms often allow repeated participation, which should be alarming. And to ensure that the participants of the selection exactly drained the deposit, scam artists strictly limit the competition in time and set almost impossible conditions. | |
Fines | This scam comes into effect at the stage of profit withdrawal. In order not to pay traders their deserved part, fraudsters, for example, refer to a certain claim of the liquidity provider, according to which the proprietary firm allegedly has to pay a penalty that is many times higher than the amount of your profit. As a result, you also owe the company. |
First installment | No self-respecting proprietary company will take money from a trader up front. Often scammers play on the victim's weaknesses, offering to manage an impressive amount of money. But in order to get the capital in full, the trader needs to pay a symbolic fee for opening an account (in most cases, scammers demand up to $500 from victims). Everything usually ends with the fact that after receiving the requested amount, the scammers simply stop answering the calls and messages of the deceived user. |
Phishing site | Scammers create a fake website masquerading as a legitimate one in order to swindle traders out of their personal data. Using this information, scammers can gain access to your account and steal your money. |
Publication of false success stories | In order to convince a trader of the coming success for sure, scammers on their official website tell fake stories about people who were ordinary office clerks/plumbers/engineers, etc., then became interested in trading on financial markets and connected their lives with prop trading, earning a multimillion-dollar fortune thanks to it. Of course, all the photos you go to the fake prop firm's resource are stock photos. |
Paid training | A trader in a proprietary company is essentially an employee and it is the direct responsibility of the firm to train him. You should be concerned if the company asks you to pay for your own training. |
If you have already suffered from the actions of prop scammers, you should
Sometimes tips on how to recognize scammers become irrelevant, as the trader has already fallen into the clutches of scammers and lost his capital. If you have submitted an official claim to a proprietary company and have not received a response within the timeframe established by the regulations, proceed to the next steps:
Stop sending funds. The first and most important step is to suspend any money transfers. For example, even if a proprietary firm assures you that by paying the fine, you will 100% receive your share of the profits, don't believe its claims. In this way, scammers are trying to take even more money from you.
Collect evidence. Screens of correspondence, receipts for transferring funds, records of phone conversations, feedback from other traders regarding cooperation with a proprietary company - all of this will be useful to you in the future to confirm the fact of fraud.
File a complaint with the financial regulator. If the proprietary firm's website indicates which public law institution regulates its activities, you can file a complaint with that supervisory body, detailing the scam scheme the company is using and attaching the evidence collected. Ideally, it is a collective complaint. You may not be able to recover your own funds, but the supervisory authority will put the firm on its blacklist, which will protect others.
Write a review. Do not let other traders fall for scams by warning them of the danger! Your honest review may force someone to stop cooperating with a proprietary firm.
To have the right to free legal support of qualified specialists and not to waste time solving a possible dispute with a proprietary firm, register on the Traders Union website and cooperate only with proven and reliable companies.
How to avoid prop scams?
In order to keep yourself safe from fraud, you need to conduct a thorough analysis of the chosen prop firm. Here are a few points to which you should pay priority attention:
Don't fall for overly tempting promises. Avoid firms that tout guaranteed profits or use strong pressure tactics. There is no quick and easy money in prop trading. Your earnings are directly related to your level of knowledge and experience, so if a firm makes promises that seem too good to be true, stay away.
Pay attention to the commission structure. Legitimate prop firms are transparent about their commission structure. Be wary of firms that require significant upfront fees or convince you to purchase training. A trustworthy company has a fair profit sharing model in place that is in its best interest as well as that of traders.
Assess the level of support. First, check the support service - what contact information is posted on the site and how quickly managers handle requests. Second, reliable prop firms almost always offer educational courses, mentoring programs, and other tools to help develop skills.
Promote reviews. To avoid falling victim to scammers, check out the company's reviews beforehand and see if it's on any blacklists. You can do this on the Traders Union website.
How do I know if a prop firm is trustable?
Fortunately, traders are not only surrounded by scammers, but also by reliable prop firms that have been operating for quite a long time and have many satisfied partners. They can be identified by the following parameters:
transparent and fair profit distribution model - the optimal profit distribution will be 80/20 or 90/10 in favor of the trader, if the firm offers less than 50%, it is not the best option for long-term work;
adequate criteria for evaluating future candidates with specific drawdown requirements and profit targets;
positive feedback on forums;
reliable, competent and prompt customer support;
availability of free training materials;
a large number of reviews on reputable sites such as Traders Union;
access to proven trading terminals;
absence of pushy and unwanted marketing - managers of legitimate prop firms always give time to make a decision and do not pressure traders.
Review a prop firm's reputation, operating history, and client feedback
Many traders mistakenly think that cooperation with proprietary firms does not carry any risks, but in fact this is not the case. You can become a victim of swindlers who promise 'golden mountains', but in fact are aimed solely at emptying other people's wallets.
Lack of licenses, problems with technical support, dubious software, lack of information on the website, unwillingness of managers to answer questions concerning the scheme of profit distribution, the amount of possible commissions, etc., paid training, competitive selection with vague conditions and with the use of real trader's funds - all this indicates that you are dealing with an unscrupulous prop-company, which has only its own earnings in the first place.
When choosing a firm, pay close attention to its age, reputation, working conditions and feedback from other traders. For additional support from professional lawyers, choose a proprietary firm from the Traders Union rating.
Conclusion
The surge in popularity of proprietary trading firms has unfortunately been matched by a rise in scams that prey on unwary traders through opaque rules, impossible withdrawal conditions, and misleading claims. As highlighted by high-profile cases like My Forex Funds and Topstep, even major industry names are not immune to controversy or regulatory action. The most powerful defense for traders is due diligence: seeking firms with transparent profit-sharing models, reliable support, and positive independent reviews. Remember, legitimate prop trading offers opportunity, not guaranteed riches, and any operation promising quick, effortless profits is a red flag. Ultimately, vigilance and skepticism are your greatest allies in protecting both your capital and your trading future.
FAQs
What are common warning signs that a proprietary trading firm may be operating a scam?
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Team that worked on the article
Oleg Tkachenko is an economic analyst and risk manager having more than 14 years of experience in working with systemically important banks, investment companies, and analytical platforms. He has been a Traders Union analyst since 2018.
Dan Blystone began his trading career in 1998 as an arbitrage clerk on the floor of the Chicago Mercantile Exchange (CME). He later traded bond and Eurex futures at proprietary firms such as Altea Trading, gaining valuable experience in high-frequency trading and risk management.
Chinmay Soni is a financial analyst with more than 5 years of experience in working with stocks, Forex, derivatives, and other assets. As a founder of a boutique research firm and an active researcher, he covers various industries and fields, providing insights backed by statistical data.
Bitcoin is a decentralized digital cryptocurrency that was created in 2009 by an anonymous individual or group using the pseudonym Satoshi Nakamoto. It operates on a technology called blockchain, which is a distributed ledger that records all transactions across a network of computers.
The CFTC protects the public from fraud, manipulation, and abusive practices related to the sale of commodity and financial futures and options, and to fosters open, competitive, and financially sound futures and option markets.
Index in trading is the measure of the performance of a group of stocks, which can include the assets and securities in it.
Cryptocurrency is a type of digital or virtual currency that relies on cryptography for security. Unlike traditional currencies issued by governments (fiat currencies), cryptocurrencies operate on decentralized networks, typically based on blockchain technology.
A private trader is an individual who doesn’t represent any institution and trades using their own capital.
