Prop Trading Firms’ Renaissance: Cutting US Clients, Integrating New Trading Platforms

The drama around prop trading is widening, as MetaQuotes is allegedly cracking down on using MetaTrader platforms. Although the Cyprus-headquartered company did not publicly confirm the restrictions, in under a couple of weeks, many prop trading firms and their brokerage partners have confirmed the forceful cessation of their partnerships. The primary concern looks to be active US clients onboard by prop trading platforms.

Although MetaQuotes did not officially confirm its crackdown, an unconfirmed email from one of its representatives is making rounds on social media and trading communities that “to have MetaTrader 5 and provide services in the USA [platforms] need to be regulated by FINRA or NFA. Even if it is for educational purposes.”

I am hoping you guys will be sharing your documentation regarding this soon.@the5erstrading @AlphaCapitalUK

Tagging @epfregnews for good luck pic.twitter.com/1zVqjke7bY

— Kenny S (@disaster_fx) February 16, 2024

MetaQuotes against Prop Trading firms

The alleged crackdown came to the limelight in early February when True Forex Funds claimed that MetaQuotes, the operator of MT4 and MT5, terminated the licenses for its trading platform. That also resulted in the causation of the prop trading platform’s services, which is now integrating cTrader, a competitor of MetaTrader, to relaunch services.

The next blow came to the Funded Engineer. The Dubai-based prop trading firm first lost FPFX as its technology partner, which offers CRMs, and then Purple Trading decided to end its brokerage services to prop platforms. Along with Funded Engineer, Purple Trading provided services to several other platforms.

Purple Trading, Blackbull Markets, Eightcap, Think Markets, and Blueberry Markets are some of the brokers that have extensively partnered with prop firms, offering grey-label licensing for MetaTrader platforms.

While Purple Trading kept its move quiet, an executive of Blackberry Markets confirmed that MetaQuotes forced the broker to end its services to Funding Pips, another prop firm.

“We’re unfortunately in breach of our grey label license ability to offer this for prop firms, so we’re forced to immediately shut down Funding Pips as a client and their server on our Demo environment,” Anish Lal, Blackbull’s Chief Business Development Officer, wrote in a statement shared with Finance Magnates.

The CEO of Funding Pips, who goes by the name Khaled on social media, also confirmed that the abrupt move of MetaQuotes came “due to active US accounts,” adding that “[Blackbull Markets] didn’t terminate our partnership, but they were forced to let us go, or they would have lost their license.”

Several prop trading platforms, including Funded Trading Plus, confirmed the decision of Eightcap to terminate services to prop trading firms from February 29. Meanwhile, Funded Trading Plus added Think Markets as its brokerage partner.

However, Eightcap did not confirm any forceful move by MetaQuotes, calling its contract terminations of commercial agreements with prop firms “not uncommon to us or anyone else in the industry.”

The splinters of the MetaQuotes' alleged move have even affected some established names in the prop trading sector. On Friday, Israel-based The5ers confirmed on Friday the temporary suspension of “the onboarding of new US traders.”

Moving to Other Brokers and Platforms

Funding Pips, which lost Blackbull as its brokerage partner, confirmed that it is in the process of integrating four third-party trading platforms: Match-Trader, cTrader, DXtrader, and TradeLocker. The prop platform is now obtaining licenses under its own brokerage license, ending its reliance on third-party brokerage services providers.

A very important update @fundingpips pic.twitter.com/tWeoBlSIGf

— Muhd Speedou (@speedouFx) February 18, 2024

Meanwhile, others are still relying on brokers. Funded Engineer has confirmed its agreement with Blueberry Markets for brokerage services. However, the platform has yet to resume its services. Funded Engineer is also migrating to its own technology stack for offering prop trading services.

Hi Everyone,

Today we added some extra servers to handle the data load, finished and uploaded the client side functionality (previously we had completed the company side backend) and prepared our corporate analytics elements.

We have connected the machine that calculates the…

— Funded Engineer (@fundedengineer) February 18, 2024

Smart Prop Trader, another prop trading firm affected by the alleged crackdown of MetaQuotes, is also in the process of migrating to new broker, Think Markets. It further confirmed that it will offer services with new trading platforms, including cTrader.

Our team is working with other brokers & bringing significant innovations that will counter these widespread industry issues within 2-3 weeks.

Think Markets live by end of next week ✅

— Smart Prop Trader (@SmartPropTrader) February 16, 2024

Dropping US-Based Customers

Meanwhile, many other prop trading platforms confirmed the termination of their services to US-based clients, whether US citizens or residents, similar to The5ers and FTMO. Maven Prop Trading, which switched its brokerage from Purple Trading to Blueberry Markets, also pulled out from the US, however, giving the US-based clients the option to use VPS located outside the US.

FundedNext, another prop trading platform, paused new sign-ups from the United States. However, it did not provide any workaround like Maven Prop Trading.

"We are exploring options to assess how we can adapt to the current situation and continue to serve you in the near future," the CEO of FundedNext, wrote on its Discord channel. "We wish to emphasize that all existing clients from the U.S. can continue to trade normally on our platform. Please note, however, that no account reset or new sign-up will be possible during this period."

Prop trading, which gained massive popularity among retail traders over the past few years, have been dominated by unregulated names. Now, many major regulated brokerages have also taken interest into this industry. OANDA, Axi, and Hantec Markets are three regulated forex and contracts for differences brokers that launched prop trading services. However, all of them kept the newly launched services outside of the US and under their offshore regulated entities.