Prop Firm Scam Watch & Blacklist Registry
An independent, evidence-backed repository tracking insolvent, legally enjoined, and high-risk prop trading firms. Updated continuously to protect retail traders from unrecoverable fee losses and predatory contract clauses.
Audited Blacklisted & Inactive Prop Firms (6)
7-Point Prop Firm Red Flag Safety Checker
Evaluating a new prop firm or an aggressive 90% discount promotion? Check the box for any warning sign present in their terms of service, platform, or Discord community to calculate instantaneous scam risk.
The firm accepts challenge fees with open rules, but once an account requests a 4-figure payout, risk teams cite retroactive rules regarding microsecond tick latency, tick scalping, or cross-account hedging without transaction logs.
How to detect: Check Discord complaints and Trustpilot 1-star reviews for patterns where traders receive generic disqualification templates only upon payout requests.
Legitimate prop firms contract with regulated Prime Brokers or institutional brokerages (e.g. Purple Trading, Eightcap, Match-Prime, DXtrade institutional feeds). Scam operators run internal B-book simulated bridges with artificially inflated slippage.
How to detect: Look at the server name in MT4/MT5 or cTrader. If the server name is identical to the marketing company without an institutional clearing broker, execution is fully synthetic.
When a firm runs perpetual 80% to 90% discount flash sales with free retries and 95% profit splits, their cash flow is reliant entirely on new challenge deposits rather than funded trader liquidity buffers.
How to detect: If discount percentages keep inflating every week, the firm is likely operating a Ponzi-style challenge liquidity cycle to meet pending payout queues.
Following MetaQuotes' crackdown on unverified prop firms in early 2024, some low-tier operators deployed custom web terminals where slippage on market orders can be manually dialed up on profitable traders.
How to detect: Test order execution speed during London/NY open. If slippage consistently skews negative by 3+ pips on limit orders, synthetic fill degradation is active.
While crypto payout rails (USDT ERC20/TRC20) are convenient, prop firms that refuse any bank wires, Rise, or Deel and operate from anonymous shell companies in Saint Vincent or the Seychelles carry zero legal trader recourse.
How to detect: Inspect company footer for a verified registered legal entity, registration number, and operating headquarters.
Firms that lock in trailing liquidation thresholds during live intraday open positions rather than balance or End-of-Day (EOD) make passing mathematically improbable for swing traders.
How to detect: Read the drawdown FAQ carefully: confirm whether the drawdown moves up when an order spikes into unrealized profit before closing.
Firms shifting from '24-hour payouts' to 'under risk review for 14-30 business days' are almost always experiencing cash-flow illiquidity or freezing payouts prior to shutting down.
How to detect: Monitor trader communities for sudden surges in 'Pending Payout' status tickets lingering over 10 days.
How Prop Firm Scams Operate: The Anatomy of a Collapse
Understanding the mechanical vulnerabilities and economic incentives behind unbacked prop firms is the best way to safeguard your trading career.
5 Steps to Take If a Prop Firm Refuses Your Legitimate Payout
Export Complete CSV Logs
Download ticket IDs, open/close timestamps, slippage, and swap fees before portal access is revoked.
Document Written Justification
Request the exact rule clause violated in writing with timestamped server logs from support.
Initiate Bank/Card Chargeback
Submit evaluation fee receipts and proof of unrendered service to your card issuer under dispute code 4853.
Public Community Warning
Publish objective evidence on Trustpilot, Reddit r/Forex, and Discord to prevent other traders from depositing.
Regulatory Submission
File an official complaint with the consumer protection bureau in the firm's registered jurisdiction.