In August 2023, the Commodity Futures Trading Commission froze the assets of MyForexFunds, a Toronto-based prop-trading firm that had collected more than $310 million in fees from over 135,000 customers. The regulator charged that the firm lied about being the counterparty to trades, ran software that slipped customer fills, and closed winning accounts on technicalities. Now a new crop of onchain prop firms is taking the opposite approach — openly documenting that they are the B-book.
The MyForexFunds Precedent
MyForexFunds wasn't just another failed prop shop. It was a warning. The CFTC's case centered on a hidden conflict: the firm told customers it passed their trades to a real market, but in reality it internalized them. That meant every time a customer lost, MyForexFunds kept the money. When customers won, the firm found reasons to shut them down. The agency's action sent a clear signal: hiding that conflict is illegal.
How the Prop Firm Model Works
Prop firms sell a paid exam. A customer pays a fee — anywhere from $50 to a few thousand dollars — and trades a simulated account. If they hit a roughly 10% profit target without breaching a drawdown limit, they get 'funded.' Then they keep 80% of any profits they make. It's a lucrative business. FTMO, the market leader, reported $329 million in revenue in 2024 across 2.3 million open accounts and has paid out over $450 million. FundedNext cleared an estimated $100 million-plus in 2024. The total addressable market for evaluation fees sits in the low billions per year.
But most customers fail. Estimates show only 5% to 10% pass the evaluation, and just 5% to 7% ever collect a payout.
The Onchain Difference
The onchain prop-firm category is roughly six months old as of mid-June 2026. Two of the three most credible onchain firms are in alpha or early launch. Their key difference: transparency. Unlike MyForexFunds, which hid its role, these firms openly document that they are the counterparty — the B-book. In the industry, B-book means the firm internalizes trades and keeps losses if the trader loses. A-book means orders go to a real venue and the firm earns only spread or commission. Firms typically A-book traders they think will win and B-book those they think will lose, to maximize profit.
The Conflict That Won't Go Away
The conflict of interest is baked in: a firm that B-books a trader has a direct financial incentive for that trader to lose. The CFTC charge against MyForexFunds was for hiding this conflict, not for having it. Onchain firms are betting that full disclosure — putting the B-book model on the blockchain for anyone to see — will satisfy regulators and customers alike. Whether that bet pays off is an open question. The CFTC hasn't issued new guidance on onchain prop firms, and the category is still too young to have faced a major enforcement test. For now, the firms are transparent. But transparency alone doesn't remove the incentive.
