A Third of All Prop Firms Have Disappeared. Here’s What You Need to Know.

If you’ve been trading prop firm challenges for the past two years, you’ve probably noticed something unsettling: firms you once trusted are going dark. Websites vanish overnight. Discord servers go silent. Payout requests hang in limbo until the firm just… stops responding.

This isn’t paranoia. It’s a pattern. And it’s accelerating.

Between 2024 and early 2026, an estimated 80 to 100 proprietary trading firms have shut down. Out of roughly 376 tracked firms, at least 84 are confirmed inactive, with another 30 showing no signs of life. That’s roughly one in three firms gone — and the shakeout isn’t over.

As a funded futures trader who has personally traded with multiple prop firms and lost money to one that collapsed, I’m writing this because no one else is being blunt enough about what’s happening. This isn’t a listicle. It’s a reality check — and a survival guide.

The Firms That Already Went Down

Let’s name names. Because if you’re about to hand over $200 to $500 for a challenge fee, you deserve to know which firms didn’t make it — and why.

MyFundedFX / SeacrestFunded — February 2026

MyFundedFX was one of the more popular mid-tier prop firms. They rebranded as SeacrestFunded after being acquired by Seacrest Markets, a CFD broker. The rebrand was supposed to signal stability — a “broker-backed model” that would outlast the independent firms.

It lasted about a year.

In February 2026, Seacrest Markets announced it was shutting down all prop trading operations to focus entirely on CFD brokerage. All prop trading accounts and open positions were closed by February 6, 2026. Funded traders with unpaid balances reported being left in limbo, with refund requests due by February 28 or else.

The lesson here is brutal: a rebrand is not a rescue. If a firm gets acquired and restructured, your funded account is just a line item on someone else’s balance sheet. When priorities shift, you’re the first thing cut.

FundingTicks — January 2026

FundingTicks was the futures trading arm of FundingPips. In December 2025, they pulled a move that should be a permanent red flag for every trader: retroactive rule changes.

They introduced a one-minute minimum holding time for scalpers, raised profit targets, and slashed the profit split — and applied all of it to traders who had already signed up under different terms. Traders who had passed evaluations found their results invalidated overnight. Their Trustpilot rating cratered from 4.1 to 3.2 stars within weeks.

By January 18, 2026, FundingTicks announced a full wind-down of all operations. To their credit, they offered refunds and partial payouts — a rarity in this industry. But the damage was done. If you were mid-challenge when the rules changed, your money and your time were both gone.

FundedFirm — Allegations of an $85M Vanishing Act

This one reads like a thriller. FundedFirm, a prop firm targeting retail traders, came under fire after dramatically reducing its claimed payout figures. The discrepancy wasn’t subtle — we’re talking about allegations involving $85 million in payouts that appear to have never existed. Investigations into potential fraud and cloning of other firms’ identities are ongoing.

This is the extreme end of the spectrum, but it illustrates a fundamental problem: there is no regulatory body specifically overseeing prop firms. Anyone with a website, a MetaTrader license (until MetaQuotes cracked down), and a marketing budget can launch one.

The Longer List

These firms have also shut down, been investigated, or stopped paying traders in 2024–2026:

• MyForexFunds — Shut down by CFTC and Ontario Securities Commission in 2023 on fraud charges. Collected over $300M in fees while allegedly manipulating conditions to make traders fail.
• TrueForexFunds — Ceased operations in May 2024. Traders with pending withdrawals were left unpaid.
• Propel Capital — UK-based firm that shut down in 2025, blaming competition for its inability to scale sustainably.
• SI World / Stocknet Institute — Announced permanent closure, despite claiming the business was “in a healthy position.”
• Crypto Fund Trader — Blacklisted for retroactively applying new rules to deny payouts, particularly for large withdrawal requests.
• Fidelcrest — Multiple reports of unjustified account terminations and payouts “reviewed indefinitely.”

This is not a complete list. It can’t be — because some firms just disappear without even announcing they’re done.

Why Are So Many Firms Failing?

The prop firm business model isn’t as simple as it looks from the outside. Here’s what’s actually happening behind the scenes.

1. The Challenge Fee Model Is a Treadmill

Most prop firms make the majority of their revenue from challenge fees — the $100 to $500 you pay upfront to take the evaluation. The actual funded trading operation is a cost center, not a profit center. When a trader passes and starts making money, the firm is paying out from a pool that’s only replenished by new challenge signups.

This creates an uncomfortable incentive structure: the firm profits most when you fail. Not in a conspiracy-theory way — most legitimate firms genuinely want good traders. But the math means they need a constant flow of new challengers to fund payouts to the successful ones. When that flow dries up, the whole thing collapses.

2. MetaQuotes Pulled the Rug

In 2024, MetaQuotes — the company behind MetaTrader 4 and MetaTrader 5 — significantly reduced support for prop trading firms using its platforms. This forced many firms to scramble for alternatives, raised costs, and accelerated the consolidation wave. Firms that couldn’t adapt simply shut down.

The surviving firms have diversified to platforms like cTrader, DXtrade, and proprietary solutions. But the MetaQuotes crackdown exposed how fragile many firms’ infrastructure really was — built on a single vendor’s goodwill.

3. Gold Broke the Model

Here’s one nobody talks about enough. Gold (XAU/USD) has been on a relentless uptrend. Many prop firms, especially forex-focused ones, have no way to hedge the risk when large numbers of traders go long gold simultaneously. The liability can become enormous, and firms with thin margins simply can’t absorb it.

One industry report noted that gold’s sustained rally created “huge liabilities” for firms that couldn’t manage the one-directional exposure. If your firm suddenly banned gold trading or added restrictive rules around it — now you know why.

4. Trust Erodes Faster Than It Builds

FundingTicks is the textbook example. Their Trustpilot went from 4.1 to 3.2 in weeks. Once traders start posting about denied payouts, changed rules, or suspicious behavior, the conversion rate tanks. New signups dry up. Revenue drops. The firm can’t pay existing traders. More complaints follow. It’s a death spiral.

The 7 Red Flags That Predict a Shutdown

After watching dozens of firms fail, certain patterns emerge. If you see three or more of these at your current firm, it’s time to start looking elsewhere.

1. Retroactive rule changes. If a firm changes drawdown rules, profit targets, or payout splits and applies them to existing accounts — not just new signups — that’s the single biggest warning sign. FundingTicks, Crypto Fund Trader, and Fidelcrest all did this before shutting down or being blacklisted.
2. Aggressive, too-good-to-be-true promotions. 90% off challenge fees? 100% profit split forever? These aren’t generosity — they’re desperation for cash flow. Legitimate firms run modest sales. Distressed firms slash prices to keep the signup volume alive.
3. Payout delays that increase over time. A firm that paid in 24 hours six months ago and now takes 2 weeks is burning through cash. The delay almost always gets worse, not better.
4. Trustpilot score in freefall. Check the trend, not just the number. A firm at 4.2 stars that was at 4.6 three months ago is more concerning than a firm that’s been steady at 3.8 forever.
5. Sudden platform migration. If your firm abruptly switches from MetaTrader to a lesser-known platform with little explanation, something forced their hand. It might be fine — or it might be the beginning of the end.
6. Support goes silent. When customer support response times go from hours to days, the team is either overwhelmed or shrinking. Neither is good.
7. Influencer marketing ramps up while quality drops. If your firm is suddenly everywhere on YouTube and Instagram but payout complaints are rising on Reddit and Trustpilot — they’re spending on acquisition instead of operations.

Which Firms Have Survived (and Why)

The flip side of this story is that certain firms have not only survived but strengthened their position. The shakeout is brutal, but it’s also clarifying. Here are the characteristics the survivors share:

• Multi-year track record. Topstep has been operating since 2012. FTMO since 2015. These aren’t hype cycles — they’re businesses with over a decade of continuous payouts.
• Transparent, stable rules. The firms that lasted don’t change evaluation rules on existing traders. They grandfather old terms and only apply changes to new signups.
• Platform diversification. The smartest firms weren’t dependent on MetaQuotes alone. They supported multiple platforms (Rithmic, CQG, TradingView, cTrader) before the crackdown forced everyone to scramble.
• Conservative growth. The survivors didn’t chase viral growth. They grew at a pace their payout operations could sustain. This is less exciting than “10x in 6 months” but it’s why they’re still here.

For our full analysis of which firms we personally trade with and recommend, visit our Prop Firm Reviews page — every rating is based on real trading experience, not affiliate incentives.

How to Protect Yourself: A Practical Framework

You can’t eliminate the risk of a firm shutting down. But you can manage it. Here’s the framework I use:

Before You Sign Up

• Check the founding date. Firms operating for 3+ years have survived at least one industry cycle. That means something.
• Read Trustpilot reviews from the last 30 days. Not the all-time score — the recent trend. Filter for 1-star reviews and look for patterns (delayed payouts, changed rules, banned accounts).
• Search Reddit and Twitter for the firm name + “payout.” Real traders share real experiences. If the only positive content is from paid influencers, that’s a signal.
• Verify the payout method. Firms that only pay in crypto with no bank transfer option are harder to trace and recover from if things go wrong.

While You’re Trading

• Don’t put all your capital into one firm. Spread challenge fees across 2–3 firms. If one goes down, you haven’t lost everything.
• Withdraw early and often. Don’t let profits accumulate in a funded account. Take every payout as soon as you’re eligible. Cash in your account is only real when it’s in your bank.
• Screenshot everything. Your dashboard, your trade history, your payout requests, the firm’s current rules page. If you ever need to dispute a denied payout, documentation is everything.

When Things Start Looking Shaky

• If they change the rules on your existing account — leave. Request your payout immediately. Don’t wait to see if it “gets better.” It won’t.
• If payouts slow down — withdraw everything you can. A delay today becomes a denial tomorrow.
• If they announce a “rebrand” or acquisition — be cautious. Sometimes it’s growth. Sometimes it’s the first step toward shutting down the prop side of the business, like Seacrest/MyFundedFX did.

What’s Coming Next for the Industry

The prop trading industry in 2026 is at an inflection point. Here’s what I’m watching:

Regulation is coming. The CFTC’s action against MyForexFunds in 2023 was the opening shot. More regulatory scrutiny is inevitable, and while that will raise costs and kill marginal firms, it will ultimately protect traders. Regulation is good for the survivors and bad for the scams.

Broker-backed models are growing. OANDA, Axi, IC Markets, and ThinkMarkets have all entered the prop space. These aren’t startups running on challenge fees — they’re established brokers with existing infrastructure, regulation, and capital. The quality bar is rising.

The $20 billion industry is consolidating. Fewer firms, but better ones. The firms that survive the next 12 months will be significantly stronger — and traders who choose wisely will benefit from better payouts, fairer rules, and more stable operations.

The Bottom Line

The prop firm shakeout is real, it’s ongoing, and it’s not something you can afford to ignore. A third of the industry has already vanished. The firms that remain are either getting stronger or getting ready to fail — and the difference between the two isn’t always obvious until it’s too late.

Do your homework. Check the red flags. Diversify across firms. Withdraw your profits. And don’t fall for the firm with the flashiest marketing and the cheapest challenge — that’s usually the one that won’t be here in six months.

We built TraderVerdict specifically because we got tired of watching traders lose money to firms that looked legitimate on the surface. Every firm on our site is reviewed based on real trading experience. We don’t rank based on who pays us the highest commission — we rank based on who actually pays their traders.

Stay safe out there. The firms worth trading with are still out there. You just have to know how to find them.

— Written by a funded futures trader who has personally lost money to a prop firm closure, and is determined to make sure you don’t.