In August 2023, the U.S. 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 had lied to its clients about trading against third-party liquidity providers. In reality, MyForexFunds was the counterparty to nearly every trade, and it used software to slip customer fills and close winning accounts on technicalities. The case exposed a dirty secret in the prop-firm industry — but instead of hiding, many firms are now openly documenting that they do exactly what MyForexFunds was accused of.
The business model behind the exams
Prop firms sell a paid exam. Customers pay a fee — anywhere from $50 to a few thousand dollars — to trade a simulated account. If they hit a profit target, typically around 10%, without breaching drawdown limits, they become “funded.” After that, they keep roughly 80% of the profits. The pitch is that the firm provides the capital; the trader provides the skill. But the economics tell a different story.
FTMO, the Prague-based market leader, reported $329 million in revenue in 2024 across 2.3 million open accounts. Over ten years it has paid out more than $450 million to traders. FundedNext, a UAE-based challenger, cleared an estimated $100 million-plus in 2024. The total addressable market for evaluation fees is in the low billions per year.
Why most traders never get paid
Pass rates are brutally low. FTMO’s pass rate for Phase 1 is about 8%. Topstep’s 2025 Combine pass rate is 16.8%. The share of all entrants who ever collect a payout is even smaller: FTMO around 7%, and The Funded Trader just 1-2% of all clients. A study by FPFX Tech found the same 7% figure across 300,000 accounts.
The math is simple: fees from the vast majority who fail far exceed the payouts to the few who succeed. That’s the engine that makes the model work.
B-book is now the open secret
Even after passing, funded accounts often still do not send orders to a real market. Instead, the firm internalizes them — a practice known as B-book. In B-book, the firm is the counterparty and profits when traders lose. In A-book, the firm passes orders to a real venue and earns only spread or commission. Firms decide which traders go to A-book (expected winners) and which to B-book (expected losers), creating a direct conflict of interest.
MyForexFunds was charged for hiding that conflict. Today, onchain prop firms openly document that they are the counterparty. The secrecy is gone. The question now is whether regulators will treat that transparency as a defense — or as an admission.
