FXCI adresses the current situation with MFF

02 Oct 2023
The Downfall of MyForexFunds Puts Prop Trading Under Threat

The sector of prop trading has gotten under the blow. The American regulator sued MyForexFunds (MFF). The company and its owner Murtuza Kazmi are accused of fraud. It’s worth noting that MFF was one of the largest prop firms in the industry. This case questions whether or not the practices of prop firms are ethical.

Legal prop firms existed for decades. In recent years, the number of such companies has grown in leaps and bounds. In fact, there’s nothing wrong when companies trade on their own money. Problems arise when it’s not their money, or they use customer orders to outrun the market. And the result is frozen assets.

FXCI the current situation with MFF

Crash of My Forex Funds

MFF is a trading name of Traders Global Inc. The company owner, Murtuza Kazmi is a well-known person in the industry. On the 29th of August, 2023, a statutory restraining order was signed against them. Their assets were frozen and all books were submitted to the CFTC for examination.

MFF ran an extensive social media advertising campaign around the world and was a typical prop company, at least on paper.

Like any other prop trading firm, MFF offered to pass the challenge – to trade on a demo account, of course, for a fee. The company was very successful – they have earned at least 310 million dollars in fees over the last years. However, according to the official accusation made by the CFTC, all trading activity of MFF was fraudulent.

In the CFTC complaint, the defendants are charged with «fraudulent attraction of clients to trade using borrowed funds, margin trading or financing of retail trade of foreign currency (Forex retail trade) and retail commodity transactions using borrowed funds». Here are some of the actual allegations against MFF:

  • MyForexFunds purposely reduced the likelihood of traders achieving profitability and success on their challenge or funded accounts. Their strategy involves terminating or suspending clients' trading accounts without reason and using some kind of software to execute trades at less favorable prices with wider spreads;
  • MyForexFunds misled their clients by giving access to demo accounts instead of live ones after they passed evaluation challenges and proved they were liable enough to deal with real money, thereby violating the rules of the contract;
  • MyForexFunds claimed they only make money when their clients do, but in fact, the company has earned at least 310 million dollars on fees charged from clients for passing their evaluation challenges over the last years.

The Future of Prop Trading

Following the accusations made against the MFF prop firm, regulators' attention to the industry has been raised. British and European regulators remain silent. But any step they take could change the industry radically as most prop firms operate outside the US.

Earlier, the Forex industry and then the binary options industry faced such supposed manipulations. Although binary options, which are themselves very complex, do not exist in the EU, CFD tools have come into being as a regulated industry.

We have seen this fraud in FX and Binary Options. Each time a broker executes a transaction against his own book (B-book) rather than using LP markup, there is an opportunity for manipulation. We’ve already seen samples in the Forex currency market where a broker charges a huge commission on managed accounts and continues to enter and exit the market until the customer’s balance becomes zero. They register transactions, so the broker makes a spread and commission! In binary options, the market from the beginning was designed to rip off customers, and they relied on naive ones.

But what’s the future of prop trading?

Why Opt for FXCI Instead of MFF?

As an MFF alternative, we offer you a transparent way to get funded and become a professional trader using our funds. We don’t purposely suspend or terminate your trading accounts in order not to share the gains with you. We don’t mislead trade commissions or use custom software to ensure trades are filled at worse prices with larger spreads.

Our system is completely transparent and fair, giving traders an opportunity to earn as they learn to trade and even get funded by our company. Our business model is completely different from MyForexFunds and we profit when our traders profit. We aim to help you succeed in the trading industry as much as possible. Therefore, FXCI prop company is an ideal option for traders to get not only funding, but also education, mentorship, 24/7 support, and an opportunity to proceed in a trading career.

In Conclusion

The downfall of MyForexFunds proves that the proverb penny - wise, pound - foolish is completely true. Unfortunately, there are always scam prop firms that will charge fees from traders who are striving to achieve success and won’t give anything in return. It’s worth noting that anyone who offers or concludes retail transactions or over-the-counter contracts with credit leverage without registration breaks the law.

If you aspire to become a funded trader with a prop trading firm, it's worth collaborating with reliable prop firms like FXCI, which provides real trading capital. When regulatory requirements are in place, compliance shouldn't be a problem for prop trading firms that offer traders access to live capital and work transparently.

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