[Warning] Prop Firm Scams: How They Work and How to Spot Them | 5 Checks Learned from the MyForexFunds Case

※ This article is not intended to defame any specific company. It is a general caution based on past public incidents and publicly available information. (Last updated: April 24, 2026)

Taking "are prop firms a scam?" seriously

Over the five years from 2020 to 2025, more than 100 firms entered the prop trading industry, and around 30 of them shut down or had payout trouble. In other words, roughly 1 in 3 firms has had some kind of problem.

This article uses the real-world MyForexFunds case (2023) and MyFundedFX case (2024) as lessons, and walks through the typical patterns behind prop firm scams and a 5-point checklist for spotting them.

The MyForexFunds case (2023): over ¥800M lost

The Canadian prop firm giant My Forex Funds (MFF) was hit with a complaint from the CFTC (the US Commodity Futures Trading Commission) in August 2023 and abruptly halted all services. An estimated ¥800M+ in trader funds was left unpaid.

Main points of the CFTC complaint

1. Traders' trades were never actually executed in the real market — they were "simulated" internally
2. Successful traders had their accounts terminated and profits confiscated over arbitrary "pretexts"
3. Numerous reports of "the company suddenly stopped responding once a withdrawal was requested"
4. The operating company's actual structure and financial licensing were opaque

Some victims reported cases like: "I passed Phase 1 and Phase 2, traded a $500K account, and the day after I requested a $30,000 withdrawal, the account was closed."

The MyFundedFX case (2024)

A similar type of trouble under a different brand. The pattern: after an announcement of a change of operating company, withdrawals from old accounts stalled. A textbook example of funds disappearing due to circumstances on the operator's side, with no fault on the user's part.

[Added September 10, 2026] We now know where "the rebrand" eventually led. MyFundedFX rebranded to SeacrestFunded in February 2025, and then rebranded again to the South African CFD broker Seacrest Markets. When we actually visited the site on September 10, 2026, myfundedfx.com redirected to seacrestmarkets.io/closed, which showed only a notice that the business had ended: "Seacrest Markets is no longer operating." As for seacrestfunded.com, it now redirects to a parked-domain ad page.

Two lessons here. First, a rebrand is often a way of postponing a problem, not solving it. If the management and the underlying culture are the same, a new name leads to the same place. Second, you can tell a company's current state from where its domain redirects to. Whether the official site has turned into a parked-ad page or a "no longer operating" notice is something you can check in one minute, whether you're buying in or about to withdraw.

5 typical patterns behind prop firm scams

Here's a rundown of the scam / quasi-scam patterns that have actually been reported.

Pattern 1: Chronic withdrawal delays

They advertise "processed within 24 hours," but actually make you wait weeks to months. They stall for time while getting you to buy the next account, the company's finances go upside-down (Ponzi-style), and in the worst case they close up shop without ever paying.

How to spot it: Check Trustpilot, X, and Reddit for reviews mentioning "withdrawal" / "出金" from the last 3 months.

Pattern 2: Retroactive rule changes and arbitrary breach calls

After a withdrawal request, they retroactively cite "this was against the rules" and confiscate the profit. Common excuses:

• "This EA violates the rules" (even though it was allowed at time of purchase)
• "The correlation between multiple accounts' profits is unnatural" (an arbitrary call by the operator)
• "This is judged as high-frequency trading" (they claim it's 3 seconds, not the stated 10-second rule)
• "Bonus rule violation" (a rule that only applies to trading done using a deposit bonus)

How to spot it: Check the history of Terms of Service changes (via Archive.org). A firm that revises its terms frequently is a red flag.

Pattern 3: Deliberately dragging out KYC (identity verification)

They demand resubmission of KYC documents right before a withdrawal request. Even after you submit, they keep saying "unclear" or "additional documents needed" over and over, and the withdrawal never actually gets processed.

How to spot it: Check Trustpilot reviews mentioning "KYC" / "verification." A firm with multiple reports of "they suddenly demanded KYC right before withdrawal" is dangerous.

Pattern 4: Unilateral account suspension

The moment a withdrawal becomes possible, they freeze the account citing a "security check" or "account review." They say "you'll hear back in a few weeks," and then the matter just disappears.

How to spot it: Search Reddit r/PropFirms and Discord communities for the number of complaints mentioning "account review" for that specific firm.

Pattern 5: Moving funds under the guise of "changing affiliated companies"

They announce "we're changing operating companies to improve service," then halt withdrawal processing on old accounts. The new company doesn't carry over the old balance, effectively confiscating the assets.

How to spot it: Avoid firms whose operating entity or partner broker changes frequently.

A 5-point checklist to spot them

The rule of thumb: only choose a firm that clears all 5 of the following.

✅ 1. Trustpilot rating 4.0+ and 1,000+ reviews

New firms naturally have few reviews, so check whether the firm has at least 1,000, ideally 5,000+, reviews and is maintaining a rating of 4.0 or higher.

• FTMO: Trustpilot 4.9 (~30,000 reviews)
• Fintokei 🎁: Trustpilot ~4.6
• Funded7 🎁: Trustpilot ~4.5
• FundingPips: Trustpilot 4.7 (~3,000 reviews)

A company whose rating has recently dropped sharply is an abnormal signal.

✅ 2. Search X (formerly Twitter) for "withdrawal" / "出金"

Check how many negative posts about "withdrawal delayed" or "can't withdraw" show up over the last 3 months. A firm with 10+ such posts surging is dangerous.

✅ 3. Check Reddit r/PropFirms

The largest English-language prop trading community. Shady moves by newer firms tend to surface here with high probability. Search using terms like:

• [firm name] payout
• [firm name] scam
• [firm name] account closed

✅ 4. 2+ years in operation and a verifiable financial license

• As a rule, avoid firms that have been operating for less than 2 years (newer firms that attract a sudden surge of popularity carry higher scam risk)
• Check the country where the financial license was obtained, such as Czech Republic, Dubai, UAE, Canada, or the US
• Check whether registration information (address, representative's name) is disclosed

✅ 5. Check real payout data in the prop-memo.com database

Our site's /stats page aggregates challenge and payout records that real, anonymously registered users have entered.

• ¥0 in recorded payouts for a firm → be cautious
• A firm with substantial, steadily growing recorded payouts → a reassuring sign

Not the amount a company publicly claims, but the amount real users have actually received is the most reliable indicator.

Firms considered relatively safe (2026 edition)

Here are firms that clear all 5 checklist items in this article, and that carry relatively low risk (listed in order of recommendation, not a ranking of safety):

1. Fintokei 🎁

• Dual presence: Czech HQ plus a Japanese entity
• Trustpilot 4.6, active community in Japan
• Continuously operating since 2023, extensive payout history
• Highest number of recorded payouts in the prop-memo.com database

2. FTMO

• Founded 2015 — one of the oldest names in the industry
• Trustpilot 4.9 (30,000+ reviews)
• Publicly claims $170M+ paid out to traders cumulatively
• The gold standard of the industry

3. Fundora

• Operated by a Japanese entity (Quantum Fund Traders K.K.)
• Supports domestic Japanese bank withdrawals — high transparency
• Short history, but as a properly registered domestic entity, relative scam risk is lower

4. Funded7 🎁

• Based in Dubai, rapid growth since entering in 2024
• Trustpilot 4.5, full Japanese UI
• Growing payout record in the prop-memo.com database

5. FundingPips

• Based in Dubai, Trustpilot 4.7 (3,000+ reviews)
• Among the cheapest pricing in the industry
• English support only, but operations are stable

Conversely, if a firm launched within the last year, or has an extremely small number of Trustpilot reviews, re-check it against this article's 5-point checklist before considering it.

If you've already been scammed

If you run into withdrawal trouble:

1. Preserve evidence: save screenshots of all emails, chat logs, and trade history
2. Share information on Trustpilot, X, and Reddit: this helps other users and puts pressure on the company
3. Report to the regulator in the country where the financial license was obtained (e.g. Cyprus CySEC, UK FCA, Malta MFSA)
4. File an online report with the CFTC (US) / FBI IC3 (US)
5. Consult a lawyer: for large losses, international litigation or a class action may be possible

In the MyForexFunds case, the CFTC complaint led to part of the assets being frozen, so reporting it is not pointless.

Related prop-memo.com tools

• 📊 Stats & payout records (/stats) — check real payout data by firm in our real user database
• 🔍 Plan comparison & search (/compare) — compare only firms that pass the checklist
• 💰 P&L dashboard (/pnl) — keep a permanent record of your own trading history (kept even if the firm disappears)
• Prop firm recommendation ranking — an overall ranking that factors in safety

Choosing only firms with all three of "years in operation, track record, and transparency" is the single strongest tactic for avoiding scams.