FundedFirm, a proprietary trading platform targeting retail traders, faces serious allegations of operating an alleged fraudulent scheme after dramatically reducing its claimed payout figures from $95 million to $9.5 million following public scrutiny. It seems that the prop copied a website of another popular trading company and offered dummy accounts to influencers.

FundedFirm Slashes Payout Claims by 90% amid Mounting Scrutiny

The platform, which launched just months ago, has drawn criticism from traders and online community for what appears to be a series of misleading claims and questionable business practices. The controversy intensified after the firm quietly adjusted its stated payout figures following an exposé video released on November 26.

YouTuber Rohit Kumar released a video titled "Biggest Scam in Prop Firm History," in which he presents alleged evidence suggesting that FundedFirm is not conducting legitimate operations.

Further investigation reveals that FundedFirm's website appears to be largely copied from established competitor FundedNext, including identical marketing language and similar images with only minor color modifications. The platform claims to have over 700,000 active members, yet maintains minimal social media presence with only 2,700 Instagram followers.

Traders point to several red flags, including the platform's limited presence on review sites. Despite claiming millions in payouts, FundedFirm has accumulated only seven Trustpilot reviews, posted in suspicious clusters during August and November 2024.

“They claimed to have paid $95M in payouts within just 3-4 months of launching. Even after revising it to $9.5M, it’s still unrealistic,” TheTrustedProp commented. “For context: Established firms like FundedNext, operating for years, paid $95M with 22,690 Trustpilot reviews.”

It appears that FundedFirm simply copied the entire content of the FundedNext website, overlooking the details. This resembles the actions of clone brokers, which have been a longstanding issue in the FX/CFD industry.

Ironically, FundedNext was recently added to the Indian regulator's warning list. Meanwhile, the allegedly impersonating brand operates without major issues, targeting traders in India.

Dummy Accounts

TheTrustedProp claims that FundedFirm has been approaching influencers with offers of dummy accounts pre-loaded with artificial trading results, presumably to create misleading promotional content.

“Shockingly, many influencers promoting FundedFirm are the same ones who previously claimed, ‘All prop firms are scams’,” TheTrusedProp added. “Now, they’ve turned around and started promoting their own prop firms while smearing legitimate competitors.”

Such actions undoubtedly harm the proprietary trading industry, which is under increasing scrutiny from regulators worldwide. In March, Belgium's FSMA issued a warning to retail investors about the dubious practices of some prop firms. Italy's Consob is also closely monitoring the sector, as confirmed by Marco Martire, the local country manager for Fintokei.

Despite claiming to operate from the UAE, the firm's legal status remains unclear, with no visible registration numbers or regulatory credentials on its platform. Attempts to verify the company's registration through UAE government portals have proved unsuccessful.

TheTrusredProp claims that FundedFirm targets traders from third-world countries, luring them with false payouts and influencer endorsements. A prop firm comparison platform has labeled this specific project a "scam" and warned: "Don't fall for these traps."

Currently, proprietary trading firms are regulated under laws related to consumer protection, data privacy, and international sanctions. While many of these firms are based in jurisdictions such as the U.S., U.K., UAE, and Saint Vincent and the Grenadines, a significant number also operate within the EU.

In early June, the Czech regulatory authority indicated that some proprietary trading models, particularly those offering funded trader services, might fall under the MiFID regulatory framework. This could potentially affect FTMO, a leading proprietary trading firm headquartered in the Czech Republic, if these regulatory changes are implemented.

Finance Magnates reached out to FundedFirm for comment and to understand their side of the story. However, as of the publication of this article, no response has been received.