In August 2023, the CFTC charged MyForexFunds (MFF) with fraud, alleging the prop trading firm was using client fees to pay out profits to other traders. Overnight, one of the largest proprietary trading firms ceased operations, freezing an estimated 300 million dollars in trader funds.
What Was MyForexFunds
MFF offered funded trading accounts: pay a fee (84 to 5,000 dollars), pass an evaluation, receive a simulated account with up to 2 million in buying power, keep 85 percent of profits. At its peak, MFF claimed 150,000 active traders.
What Went Wrong
The CFTC complaint alleged three problems. First, the evaluation was almost impossible to fail - designed to collect fees, not identify talent. Second, the firm used new traders' fees to pay withdrawals requested by existing traders. Third, MFF was not registered with the CFTC.
The Collapse in Sequence
The complaint landed in the final days of August 2023, joined by parallel action from the Ontario Securities Commission in Canada. Within days, MetaQuotes, the company behind MT4 and MT5, revoked MFF's terminal licenses. Platforms went dark mid-session, and traders with open positions watched them close without consent.
A court-appointed receiver took over the websites and opened a claims process. Distributions to affected traders began the following year, but months of waiting and partial recoveries were the norm. The final tally confirmed the oldest rule in finance: custody is the risk.
Red Flags Hindsight Made Obvious
Unrealistic profit targets (8 percent monthly with 5 percent max drawdown). Aggressive marketing with affiliate commissions. Lack of regulatory registration. The math never added up - if skilled traders could consistently generate 8 percent monthly, why would they need MFF?
The Industry After the Crackdown
The enforcement reshaped the entire prop firm sector. Dozens of firms relying on the same MetaQuotes infrastructure shut within weeks. Survivors restructured: some sought registration, some moved offshore, and some collapsed a year later under their own payout failures.
MetaQuotes tightened its licensing, and alternative platforms such as cTrader and TradeLocker absorbed the displaced business. The industry that emerged is smaller, quieter, and more careful about who it calls an investor.
What Traders Can Learn
First: if you can't explain how a company makes money from you, you're the product. Second: regulatory registration matters. Third: skill is demonstrated by track record, not evaluation. A trader who can consistently profit doesn't need someone else's capital.
How to Vet Any Prop Firm Today
Before paying an evaluation fee anywhere, verify four things. Identify the legal entity that holds your money and where it is incorporated. Confirm the payouts of the last six months are documented publicly, not in screenshots. Ask whether the firm's own capital is at risk or only your fees. Read the marketing tone: a firm selling financial freedom is selling a dream, while a firm publishing its payout ledger is selling a service.
The Legitimate Alternative
On Fahchain, you trade your own capital with your own risk parameters. Spreads opening at 0.2 pips, execution at 28ms, negative balance protection. No evaluation to game, no profit split. Your capital is in segregated accounts at tier-one banks.
Operating Rules After MFF
Treat the file as a permanent checklist. Any platform combining upfront fees, withdrawal friction, and no regulator should be treated as a cost, not a broker. If you still want a funded-account challenge elsewhere, cap total fees at an amount you can lose entirely and log the experience as tuition. On Fahchain, the productive habit is the one the MFF victims never got to practice: start small, withdraw profits on a fixed schedule, and confirm the money actually moves before you scale anything.