The prop firm space has been exceedingly volatile over the last few months, with a number of the most known prop firms being shut down or ceasing operations.In March 2024, The Funded Trader (TFT) ceased trading and cancelled their agreements with all traders in their books. This comes as a giant shock to traders and industry spectators, as TFT was considered one of the largest firms with a loyal trader fan base.
In this article, we’ll look at everything we know about TFT closing, what has happened so far and what this means for traders. So, let’s get into it…
The Funded Trader (TFT) Ceases Operational Activities
If you head over to the website of TFT, this is what you’ll see.
There is text explaining that the firm has currently paused all operations and is hoping to resume operations soon. Note, we have seen this promise with prop firms previously that have been shut down.Interestingly, there is a countdown timer with 19 days showing – claiming the future of TFT is coming soon.Of course, many traders are doubting that TFT will come and are feeling incredibly frustrated with the owner shutting down the firm. This begs the question, why has it stopped trading?
Why Has TFT Shut Down?
Despite the CEO, Angelo Ciaramello, being vocal on X and in the Discord server, it’s still very unclear as to why TFT has shut down. However, there are rumours circulating within the online communities…
Rumour 1 – The rumour picking up the most momentum is that The Funded Trader has faced legal action, much like MyForexFunds. This means that regulatory bodies have put a stop to the business, due to its Ponzi business model.
Rumour 2 – The second rumour is that although TFT has not met legal action yet, it’s on the way if they do not restructure the business away from the current ponzi scheme model they operate under. The downtime is an attempt to restructure, to avoid penalisation.
Rumour 3 – The third rumour is that the CEO has pulled the rug and decided to shut up shop, take the profits and run.
Rumour 4 – The last rumour we’ve seen is that since MetaQuotes did no longer wish to work with Ponzi prop firms like The Funded Trader, they have had a huge number of issues dealing with the nameless platforms they’ve been forced to work with. This is plausible.
It’s currently not clear which of these are true, if any, but time will tell us, as TFT is supposedly relaunching within the next month.
What Has Happened To Trader Accounts?
Trader accounts have all been terminated immediately and profits have not been paid to traders in profit. At the time of writing, as far as we can see, challenge fees have not been refunded either for traders undergoing challenges, which is concerning.The email sent to traders stated that the ‘agreement’ between TFT and traders has been cancelled.The email notification doesn’t appear to have any further clarity on the situation or whether traders can get their funds back.
What Will Happen Next With TFT?
What will happen with The Funded Trader is currently unclear. We can speculate and if history is something to go by, at this point in a prop firms life cycle, it’s likely that it’ll be shutting up shop permanently, and we won’t hear from them again.However, that’s not guaranteed to be the case, and we may be surprised with a new brand and a new business model. But what does this mean for traders with funded accounts and live challenges? We can’t be certain, but it doesn’t sound good!
The CEO is seemingly fairly active on X and within the Discord server. If you’re a trader that has been hard done by, it will be worthwhile keeping a close eye on these platforms for updates over the coming weeks.
What Should Traders Do To Remain Safe With Prop Firms?
Hope is not lost! Take a look at the prop firms that have:
- Been shut down by regulators.
- Disappeared into thin air with excuses.
- Had MetaQuotes suspend their licence.
What do they all have in common?
They are all ‘simulated’ prop firms that offer traders fake capital to trade with. The business model of these companies relies constantly on traders failing their challenges, to pay out the withdrawals of the profitable funded traders. A business model that requires new sign-ups to pay existing sign-ups is a Ponzi scheme – which regulators hate, obviously!
However, not all prop firms operate in this way. Real money prop firms have an entirely different business model.
Take Lux Trading Firm for example:
We offer our funded traders up to $10,000,000 in real trading capital. This means that when they make profit, we make profit – due to the profit share. If we never had another trader sign up, the business would still run and remain operational due to the existing traders – this is not a Ponzi scheme.Hence, we still offer MetaTrader to our funded traders and we operate in the way traditional brick and mortar prop firms operate – a business model that has been around for decades.Whether you work with Lux Trading Firm or not – working with a real money prop firm is the only way to reduce your risk of working with a prop firm that will be shut down by the regulators.
In Summary – TFT Shuts Down!
In conclusion, The Funded Trader ceasing operations is not surprising to us – it’s probably just another Ponzi-based prop firm getting shut down, as we’ve seen time and time again. If you’re serious about looking to become a funded trader, work with a real money prop firm like Lux Trading Firm and get funded!
