Has the retail prop trading market become oversaturated? Ascetic Capital's case, which spent more time announcing its launch than actually operating, might be tangible proof. The firm announced it is “refunding everyone” and ceasing operations.

On the bright side, the refund waiting list won't be too long, given they only managed to sell a few challenges.

Prop Firm Ascetic Capital Sets New Record for Shutting Down

Ascetic Capital announced today (Tuesday) that it's initiating refunds and halting operations “before even a single trader gets funded to mitigate the damage.”

According to their social media statement, the official launch in late November “did not meet even the most modest expectations.”

In their first (and only) full week of operations, Ascetic Capital sold just four challenges. The prop firm explains this triggered a breach of contract conditions and led to investors pulling out.

“We truly thought we had everything needed to succeed; financial backing, competitive pricing, and simple, transparent rules,” Ascetic Capital explains. “But despite all our efforts, the response was far from what we had envisioned. The responsibility lies solely with us.”

However, credit must be given to the firm for their honest and transparent approach, avoiding any pretense that everything was fine or misleading potential clients in hopes of a turnaround.

“We misjudged the market and overestimated our ability to bring our vision to life,” the prop firm admitted.

The firm spent months teasing its launch, first appearing on social media in July. From the start, they suggested creating an A-book firm, unlike most prop trading companies operating on B-Book models. However, if they were truly an A-Book firm, they wouldn't have needed to worry about initial sales numbers.

The service was initially scheduled to launch in October, but Ascetic Capital announced a delay “due to unforeseen circumstances” beyond their control. The launch finally occurred on November 28, but the firm quickly decided to exit the market.

Growing Prop Trading Industry Casualties

On the same day Ascetic Capital entered the market, Finance Magnates reported the closure of another prop trading firm, Smart Prop Trader. It joined an expanding list of sector companies unable to survive in an increasingly competitive market.

“Smart Prop Trader will no longer onboard new traders,” the company commented in a social media post. “Smart Prop Trader is committed to doing the right thing by prioritizing fairness, transparency, and respect for our traders, and providing extra time for traders to earn payouts.”

Industry sources indicate at least 50 other prop firms ceased their operations this year.

“These shutdowns have resulted in significant financial losses for hundreds of thousands of traders who were either locked out of accounts they had purchased or never received payouts they had earned,” FunderPro’s Alex Zanutto explained.

Interestingly, industry representatives remain optimistic about 2025, expecting above-average trading conditions. However, 71% of U.S. respondents don't rule out consolidation and increasing dominance of major players.