According to details provided by moderators on Sway Funded's Discord server, the company has decided to acquire its struggling competitor, Karma Prop Traders, taking over its clients and their active challenges. For Sway Funded, this marks another acquisition of a prop firm facing liquidity issues within the past few weeks.

Karma Prop Traders Acquired by Sway Funded

Sway Funded clients reportedly received emails yesterday evening (Wednesday) informing them that the prop firm they use has purchased its competitor Karma Prop Traders, which announced solvency and liquidity problems earlier this month.

“I just got a mail from sway that Karma is acquired by Sway Funded,” wrote a Discord user with the pseudonym Bunny on Sway Funded's server. Although the information has not yet been officially confirmed by the prop firm, statements from moderators on the company's official channel strongly suggest this.

Around noon, a moderator using the pseudonym Cy stated that there was no official information yet, but added, “You will hear from us for any update regarding anything from Karma.”

Another moderator, nicknamed Rodri, was more forthcoming, admitting that users should “be hearing instructions and exact information very soon via email.”

“Sway has come to the rescue for all those traders who had outstanding accounts and outstanding payouts with Karma,” he added.

Although Karma operated in the prop trading market for only a brief moment, it quickly gained investors' sympathy, introducing Match-Trader integrated with TradingView to its offering just a few months after launch.

Karma's Quick Start and Swift End in Prop Trading

The company's troubles began barely two weeks ago when Founder Eshan Balapatabendi announced liquidity problems and the need to halt further operations.

“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.”

Balapatabendi blamed the failure on excessive spending on in-house tech and “cheaters” exploiting loopholes in challenges, which allegedly drove the company into financial trouble.

Although he initially claimed he wasn't considering selling his business to another prop firm, by the end of last week, information emerged that Karma was in “advanced negotiations” with a potential buyer.

“KARMA is currently in an advanced stage of negotiations with a leading Prop Firm in the industry regarding a possible acquisition. The Company appreciates our transparency and sees huge benefits to the community we have built,” Balapatabendi commented on the firm's official Discord.

It's now known that the company in question is Sway Funded.

Sway Funded Rescues Another Prop Firm

As it turns out, this isn't Sway Funded's first acquisition in recent weeks. As Finance Magnates reported in late July, the company also reached an agreement with MyFlashFunding, which had been struggling with platform issues.

Information provided by both companies indicated that MyFlashFunding clients were transferred to Sway Funded.

“We understand the importance of a smooth transition. MyFlashFunding traders will be seamlessly migrated to the Sway Funded platform, ensuring they can continue their trading journey without disruption,” stated the announcement regarding the acquisition decision.

New prop firms are emerging rapidly and failing just as quickly, with only the strongest surviving in the market. Although some consolidation is taking place, data from Devexperts shows no shortage of those willing to try their hand in this industry. Over the past 12 months, the trading platform provider onboarded over 40 prop firms to DXtrade, its own trading tool