Karma Prop Traders announced over the weekend that it's suspending operations.
The company cited alleged exploitation of challenges by some users as a reason for closure.
Just a week
after introducing a new trading platform and several significant updates, prop
firm Karma unexpectedly announced the cessation of its operations. Founder
Eshan Balapatabendi claims he "had good intentions" but encountered
"roadblocks" that made his business "unsustainable."
The End of Karma Prop
Traders
Karma's
rise and fall in the market was remarkably swift. Despite garnering positive
reviews, the prop firm existed for only two months. Finance Magnates
reported just a week ago that the company had partnered with Match-Trade
Technologies to provide its clients with a new version of Match-Trader
integrated with TradingView.
In
addition, the firm had announced five significant updates that were either
being implemented or planned for the near future. This makes the decision to
cease operations all the more surprising.
"I
started Karma to build something transparent and sustainable,"
Balapatabendi commented on the official Discord channel. "Unfortunately,
there were a lot of roadblocks in the way which has caused us to be
unsustainable."
What led to
the firm's unsustainability? According to the Founder, there were two main
reasons. The company initially relied on a promised tech solution from an
unnamed provider, which failed to materialize. This delay drained costs for
about four months.
Secondly,
after launching, Karma discovered that their risk checks were not implemented
correctly. This oversight allowed traders who should have been denied to pass
through Phase 1 and Phase 2, including potential cheaters. As a result, the
company faced solvency problems.
Eshan Balapatabendi, the Founder of Karma
"We
did not catch the cheaters that were on our system," Balapatabendi added.
"This caused cashflow issues which has now left us with no
liquidity."
This is not
the only prop firm that has announced a closure recently. In mid-July, Funded
Engineer reported its closure despite attempts at "strategic
restructuring" to stay in the market.
Allegedly,
external entities expressed interest in acquiring Karma, but the founder
declined. Currently, efforts are underway to ensure payouts to traders who
generated their profits legitimately.
"I
know people will hate me or think negatively. However, I truly did have good
intentions. Sorry to everyone involved. I wish everyone the best in their
trading journey ahead," Balapatabendi concluded.
Why Prop Firms Are Closing
In recent
months, several other companies have also suspended their operations. In May,
True Forex Funds decided to take a similar step as it struggled to stabilize
its financial position, and in March, SI World exited the market.
According
to FunderPro, more than 50 proprietary trading firms might have disappeared
from the market this year alone. FunderPro's Alex
Zanutto points out that the traditional prop
trading model is fundamentally flawed and unsustainable.
Many
firms operate on a virtual trading system where:
Funded
traders' trades never reach the real market, generating no actual profits.
Firms can
potentially manipulate markets to make traders fail challenges.
Payouts
come solely from challenge purchase fees, not real trading profits.
“The issue
plaguing the industry is the ‘sell as much as you can’ approach, often coupled
with the promise of easy money. The reality is that trading requires hard work
and time to master, and not everyone will succeed. Just as not everyone can
qualify for the Olympics, not everyone is meant to be funded,” Zanutto
commented.
Just a week
after introducing a new trading platform and several significant updates, prop
firm Karma unexpectedly announced the cessation of its operations. Founder
Eshan Balapatabendi claims he "had good intentions" but encountered
"roadblocks" that made his business "unsustainable."
The End of Karma Prop
Traders
Karma's
rise and fall in the market was remarkably swift. Despite garnering positive
reviews, the prop firm existed for only two months. Finance Magnates
reported just a week ago that the company had partnered with Match-Trade
Technologies to provide its clients with a new version of Match-Trader
integrated with TradingView.
In
addition, the firm had announced five significant updates that were either
being implemented or planned for the near future. This makes the decision to
cease operations all the more surprising.
"I
started Karma to build something transparent and sustainable,"
Balapatabendi commented on the official Discord channel. "Unfortunately,
there were a lot of roadblocks in the way which has caused us to be
unsustainable."
What led to
the firm's unsustainability? According to the Founder, there were two main
reasons. The company initially relied on a promised tech solution from an
unnamed provider, which failed to materialize. This delay drained costs for
about four months.
Secondly,
after launching, Karma discovered that their risk checks were not implemented
correctly. This oversight allowed traders who should have been denied to pass
through Phase 1 and Phase 2, including potential cheaters. As a result, the
company faced solvency problems.
Eshan Balapatabendi, the Founder of Karma
"We
did not catch the cheaters that were on our system," Balapatabendi added.
"This caused cashflow issues which has now left us with no
liquidity."
This is not
the only prop firm that has announced a closure recently. In mid-July, Funded
Engineer reported its closure despite attempts at "strategic
restructuring" to stay in the market.
Allegedly,
external entities expressed interest in acquiring Karma, but the founder
declined. Currently, efforts are underway to ensure payouts to traders who
generated their profits legitimately.
"I
know people will hate me or think negatively. However, I truly did have good
intentions. Sorry to everyone involved. I wish everyone the best in their
trading journey ahead," Balapatabendi concluded.
Why Prop Firms Are Closing
In recent
months, several other companies have also suspended their operations. In May,
True Forex Funds decided to take a similar step as it struggled to stabilize
its financial position, and in March, SI World exited the market.
According
to FunderPro, more than 50 proprietary trading firms might have disappeared
from the market this year alone. FunderPro's Alex
Zanutto points out that the traditional prop
trading model is fundamentally flawed and unsustainable.
Many
firms operate on a virtual trading system where:
Funded
traders' trades never reach the real market, generating no actual profits.
Firms can
potentially manipulate markets to make traders fail challenges.
Payouts
come solely from challenge purchase fees, not real trading profits.
“The issue
plaguing the industry is the ‘sell as much as you can’ approach, often coupled
with the promise of easy money. The reality is that trading requires hard work
and time to master, and not everyone will succeed. Just as not everyone can
qualify for the Olympics, not everyone is meant to be funded,” Zanutto
commented.
Damian Chmiel is a Senior Analyst & Editor at Finance Magnates with more than 15 years of experience in the CFD and online trading industry. Active as both a trader and journalist since 2010, he focuses on broker coverage, fintech innovation, and regulatory developments across Europe, the Middle East, and Asia.
His work includes interviews with C-level leaders at major brokerages and fintech platforms, as well as co-authoring Finance Magnates’ quarterly industry benchmarking reports. Damian’s reporting is data-driven, market-aware, and grounded in direct industry engagement. His analysis and commentary have also been cited by external media outlets, including Investing.com, Binance, The Asset, Stockhead, and Dispatch.
Education:
MA in Finance and Accounting, Cracow University of Economics
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This session brings one seasoned trader to the stage for an unfiltered account of the position that still defines how they think about markets.
Attendees will walk away with:
-A first-hand account of how a conviction trade is built, from thesis and entry through position management and exit
-Understanding of what turns a market observation into a live position, and what holds it when conditions shift
-Insight into how timing, execution quality, and market structure shaped the final result
-Perspective on what the trade revealed about edge, risk tolerance, and when to hold through a position moving against you
-Clarity on what separates a well-built trade from a well-timed one
Most market post-mortems describe what happened to prices. Few describe what happened in the trading room while the position was open: the entry conviction, the moments that tested it, and the exit decision that closed the book.
This session brings one seasoned trader to the stage for an unfiltered account of the position that still defines how they think about markets.
Attendees will walk away with:
-A first-hand account of how a conviction trade is built, from thesis and entry through position management and exit
-Understanding of what turns a market observation into a live position, and what holds it when conditions shift
-Insight into how timing, execution quality, and market structure shaped the final result
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This session brings one seasoned trader to the stage for an unfiltered account of the position that still defines how they think about markets.
Attendees will walk away with:
-A first-hand account of how a conviction trade is built, from thesis and entry through position management and exit
-Understanding of what turns a market observation into a live position, and what holds it when conditions shift
-Insight into how timing, execution quality, and market structure shaped the final result
-Perspective on what the trade revealed about edge, risk tolerance, and when to hold through a position moving against you
-Clarity on what separates a well-built trade from a well-timed one
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This session brings one seasoned trader to the stage for an unfiltered account of the position that still defines how they think about markets.
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-Understanding of what turns a market observation into a live position, and what holds it when conditions shift
-Insight into how timing, execution quality, and market structure shaped the final result
-Perspective on what the trade revealed about edge, risk tolerance, and when to hold through a position moving against you
-Clarity on what separates a well-built trade from a well-timed one
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This session brings one seasoned trader to the stage for an unfiltered account of the position that still defines how they think about markets.
Attendees will walk away with:
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-Understanding of what turns a market observation into a live position, and what holds it when conditions shift
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In this discussion, we will explore:
-The role of AI in democratizing access to trading tools, insights, and strategy development
-How crypto and blockchain can enable broader participation beyond traditional financial systems
-Addressing access barriers: infrastructure, education, and affordability in underserved communities
-Opportunities for brokers and platforms to tap into the informal trading economy
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In this discussion, we will explore:
-The role of AI in democratizing access to trading tools, insights, and strategy development
-How crypto and blockchain can enable broader participation beyond traditional financial systems
-Addressing access barriers: infrastructure, education, and affordability in underserved communities
-Opportunities for brokers and platforms to tap into the informal trading economy
As crypto and CFD trading continue to expand across Africa, access to advanced tools and market insights remains uneven. This session explores how AI and blockchain can bridge that gap by empowering informal traders and underserved communities to participate more effectively in digital financial markets. The discussion will focus on practical applications of technology to improve accessibility, education, and investment outcomes in both formal and informal sectors.
In this discussion, we will explore:
-The role of AI in democratizing access to trading tools, insights, and strategy development
-How crypto and blockchain can enable broader participation beyond traditional financial systems
-Addressing access barriers: infrastructure, education, and affordability in underserved communities
-Opportunities for brokers and platforms to tap into the informal trading economy
As crypto and CFD trading continue to expand across Africa, access to advanced tools and market insights remains uneven. This session explores how AI and blockchain can bridge that gap by empowering informal traders and underserved communities to participate more effectively in digital financial markets. The discussion will focus on practical applications of technology to improve accessibility, education, and investment outcomes in both formal and informal sectors.
In this discussion, we will explore:
-The role of AI in democratizing access to trading tools, insights, and strategy development
-How crypto and blockchain can enable broader participation beyond traditional financial systems
-Addressing access barriers: infrastructure, education, and affordability in underserved communities
-Opportunities for brokers and platforms to tap into the informal trading economy
As crypto and CFD trading continue to expand across Africa, access to advanced tools and market insights remains uneven. This session explores how AI and blockchain can bridge that gap by empowering informal traders and underserved communities to participate more effectively in digital financial markets. The discussion will focus on practical applications of technology to improve accessibility, education, and investment outcomes in both formal and informal sectors.
In this discussion, we will explore:
-The role of AI in democratizing access to trading tools, insights, and strategy development
-How crypto and blockchain can enable broader participation beyond traditional financial systems
-Addressing access barriers: infrastructure, education, and affordability in underserved communities
-Opportunities for brokers and platforms to tap into the informal trading economy
