The Recent Situation with Prop Firms and Meta Quotes' Decision for US Traders (2024)

FAQs

What's going on with prop firms in the US? ›

Major industry players have been navigating significant regulatory challenges, particularly concerning their operations in the United States. The heart of the matter is the concern over prop trading platforms onboarding U.S. clients because of the industry's relative lack of regulatory oversight in the country.

MetaQuotes, the developer of popular trading platforms MetaTrader 4 and MetaTrader 5, is cracking down on several prop trading firms such as Ftmo, the5ers, etc., and forcing many brokers to terminate their services (if these firms do not comply). This decision has had a negative impact on most prop traders in the US.

Today, MetaQuotes decided to abruptly halt services, due to… Blackbull, like a few other brokerages, took advantage of their MetaTrader license and grey-labeled them to prop trading companies. As confirmed by Lal, the broker only allowed Funding Pips to operate on its “demo servers via MT5.”

Meta Quotes, the company behind the popular trading platform MetaTrader, has made the decision to restrict access to their platform for US traders. This decision has caused some prop firms to face challenges and has raised concerns about the future of prop trading.

US-based clients face restrictions from many prop trading firms due to regulatory concerns and MetaQuotes' crackdown, though some firms are finding alternative platforms to continue servicing US clients.

In what appears to be related to the latest MetaQuotes crackdown on the proprietary trading landscape, prop firm FTMO has stopped onboarding US clients, Finance Magnates has learned. New traders attempting to register from a US IP address were unable to complete the registration form.

The Funded Trader shut down their website, trading platform and operations. In this video I talk about what happened, whether they are gone forever, what it means for anyone trading with the Funded Trader and what to do now, what prop firms to look at.

Yes, the MT4 WebTrader trading platform is legitimate.

Why MetaTrader is removed? ›

While the exact reasons for the removal remain unclear, the prevailing speculation ties it to the Republic Bank of India's (RBI) stringent stance against unregulated forex trading. In November 2023, the RBI issued warnings to 75 unauthorised entities for operating without proper authorization.

Profits from trades are generally divided between the firm and the prop trader; however, the risk distribution is asymmetric. This means that in the event of a loss, the trader bears 100% of the losses, while they don't receive 100% of the profits.

In a typical challenge model, the prop firm will give the trader a certain amount of virtual money to trade with. The trader will then have to meet certain profit targets in order to pass the challenge. Once they pass the challenge, they will be given a funded account that they can use to trade with real money.

Prop firms are an excellent source of accessing further capital to increase profit potential. Passing a prop firm's evaluation means reaching a profit target while staying within its risk management rules. Prop firms require traders to use their brokers, which can be positive or negative depending on the broker.

Whether it be forex/futures or even stocks. US law generally allows prop firms to operate and for them to provide traders with capital to trade.

Unfortunately, at present, we are not able to do that in the United States due to specific conditions in the market segment there. Therefore, we have decided to suspend the purchase of the FTMO Challenge for our new and existing US clients (nationals), just as we put a hold on onboarding new US clients.

Proprietary trading by financial institutions racked up huge losses and was one of the factors that forced American taxpayers to bail out the banking system. That crisis destroyed financial institutions, caused significant investor losses, and obliterated the household wealth of average Americans.

cTrader does not offer its services to United States residents due to regulatory reasons. Contract for difference (CFD) trading is prohibited by the US financial authorities. cTrader does not service US residents. An attempt to sign up/in will fail if you confirm your US residence.