FPFX Tech accuses prop firm Funded Engineer of fraud, wash trading

Retail prop trading tech provider FPFX Technologies, LLC (FPFX Tech), has terminated its licensing agreement with the prop firm Funded Engineer following an internal audit.

The audit unveiled what the vendor alleges to be “a months-long scheme” by Funded Engineer to deceive both FPFX Tech and the public by inflating payout figures through illicit activities, FPFX Technologies told FinanceFeeds.

The probe identified several fraudulent actions conducted by Funded Engineer, including the creation of fake trading accounts, bypassing Anti-Money Laundering (AML) and Know Your Customer (KYC) protocols, engaging in wash trading, and generating fictitious payouts. These activities were purportedly designed to overstate the firm’s payment activities, thus misleading traders and FPFX Tech alike.

Specific findings from the audit revealed that Funded Engineer manually created what seemed to be fake user profiles in their administrative portal. These profiles, lacking any payment history or billing details, were directly provided with funded accounts, circumventing the firm’s usual requirement for traders to complete a challenge before obtaining such accounts.

Further infractions included the manual overriding of AML/KYC checks, allowing these “individuals” to be approved for funded accounts without the standard due diligence. Additionally, Funded Engineer’s personnel were found to have conducted wash trading—a practice where trades are made without economic substance but to create misleading activity—purely to inflate the firm’s payout statistics. 

The audit also discovered that despite approving payouts in the system, Funded Engineer did not actually disburse any funds to these fictitious accounts. Instead, the prop firm pretended to make payments through cryptocurrency wallets and global payroll services without any corresponding blockchain transactions.

FPFX Tech’s probe concluded that Funded Engineer had overstated its payouts by more than $2 million, a fact promoted by one of its founders, Tristian Talbot, on social media. 

Justin Hertzberg, CEO of FPFX Tech, was quoted as saying, “It is disheartening that a firm like Funded Engineer would engage in activity that would appear to defraud FPFX Tech, which was instrumental in Funded Engineer’s rise within the prop space and, more importantly, to misrepresent material facts to unwitting traders simply looking for a trading opportunity. To ensure the growth and survival of the prop trading industry, good actors and ethical practices must prevail. We will continue to do our part to ensure licensees of our technology conduct themselves accordingly.”

In response to these findings, FPFX Tech plans to file complaints with regulatory authorities and notify other vendors who may be affected by Funded Engineer’s actions, given their independent AML/KYC obligations. 

Per its website, Funded Engineer is headquartered in the United Arab Emirates and has been led by CEO Tristian Talbot for the past five years. The prop firm offers account sizes from $6,000 to $300,000 and includes both 1-step and 2-step evaluation challenges to accommodate different trading strategies. In the 1-step challenge, traders aim for a 10% profit target, while the 2-step challenge sets a 10% goal for Phase 1 and a 5% for Phase 2, with maximum drawdown limits between 6% and 10%. 

Funded Engineer did not respond immediately to a FinanceFeeds request for comment.

  • Financefeeds.com