MPFunds shutdown reveals financial and regulatory issues, marking a significant event in the prop trading industry’s recent struggles.
MPFunds shutdown reveals financial and regulatory issues, marking a significant event in the prop trading industry’s recent struggles.
MPFunds, hailed as Asia’s first Modern Prop Firm has announced its shutdown, highlighting significant challenges in the prop trading sector. The company, known for offering retail traders the opportunity to run funded accounts through trading challenges, revealed the decision via an open letter from founder and CEO Dean Wong on its website.
According to Wong, the closure was precipitated by the abrupt termination of MPFunds’ banking services. The firm had been securing a Series-A financing round scheduled for September 11, 2024, which also fell through. Recent findings of “suspicious activities” on the platform, where traders allegedly exploited the system, caused a breakdown in the financing process.
MPFunds joins a growing list of proprietary trading firms facing shutdowns in recent months, a trend attributed to intensified regulatory scrutiny, heightened caution from trading platform providers, and fierce market competition. The Firm blindsided its affiliates, who sell trading challenges on the firm’s behalf. Prop Firm Match, one such affiliate, announced on X (formerly Twitter) that it had not received prior information. Moreover, the site promised compensation to affected members by offering free challenge accounts from other firms, with provisions depending on the status of their previous accounts.
In his letter, Wong expressed deep regret over the closure, citing regulatory challenges and banking issues as critical factors. Despite presenting evidence and legal documents to the bank, MPFunds’ appeals for reinstatement were denied, exacerbating the firm’s financial difficulties. Additionally, Wong highlighted issues with some users taking advantage of the platform, which contributed to the collapse of the planned Series-A funding.
Wong’s message to clients and staff reflected his dismay and appreciation for the support MPFunds had received. He acknowledged his team’s hard work and dedication and expressed sorrow for the outcome, emphasizing that he decided with a heavy heart. As MPFunds exits the trading scene, the industry watches closely to see how affiliates and traders will navigate the fallout from this high-profile closure.
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