Funds for Traders announced that it is shutting down all operations permanently after Australian broker Eightcap announced it will stop serving proprietary trading firms.
Despite “numerous efforts” to rectify the situation, the company could not continue its operations after “receiving news from Eightcap that they will no longer be supporting the MetaTrader 4 and MetaTrader 5 platforms for prop trading.”
The decision has caught many in the industry off guard, prompting firms to seek alternatives as soon as possible.
“MetaTrader has been a cornerstone of our services, and without it, we cannot continue to operate effectively. We understand that this is sudden and disappointing news, especially given the hard work and commitment from everyone involved,” Funds for Traders said on its website.
To all our incredible traders, it’s been an honor to be part of your journey. Together, we’ve changed lives globally. Thank you for your trust during your adventure with us.
Wishing you continued success in all your future endeavors! ❤️ pic.twitter.com/vSkVFiizjZ— Funds For Traders (@fundsfortraders) August 15, 2024
The impact of these policy changes is broad, affecting prop firms and their clients globally. Top Tier Trader, for example, has reportedly banned traders from several countries, including the UK, India, and Germany, offering refunds but withholding payouts.
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Meanwhile, prop firms like The5ers and Smart Prop Trader have openly discussed the challenges posed by brokers’ reluctance to onboard third-party clients, a practice now under scrutiny. These firms argue that the indirect relationship between prop traders and brokers complicates compliance with regulatory standards. According to them, these developments are prompting a shift towards brokers that can accommodate third-party arrangements, such as cTrader.
Affected prop firms that use Eightcap and are seeking new brokerage services include names like Blue Guardian, Funded Trading Plus, and The Funded Trader. Among those relying on ThinkMarkets are AquaFunded, Bespoke, Forex Capital Funds, Goat Funded Trader, Instant Funding, Lark Funding, Ment Funding, My Flash Funding, My Funded FX, Skilled Funded Traders, Swift Funding, The Funded Trader, and Traddoo.
Earlier this year, the Italian securities regulator, Consob, issued a public advisory warning about the dangers associated with proprietary trading (prop trading) firms. According to Consob, these firms trade for their own accounts and offer consumers opportunities to engage in a shadow investment game, which can be costly and lead to reckless behavior.
Prop trading firms allow consumers to trade various financial instruments such as shares, bonds, commodities, cryptocurrencies, CFDs, and forex products without using their own capital. However, the seemingly risk-free nature of these opportunities often masks complex financial risks.
