FPFX Technologies terminates cooperation with the proptrading company Funded Engineer due to fraud

Company FPFX Technologies from Boca Raton, Florida announced the end of cooperation with a Dubai proptrading company Funded Engineer (fundedengineer.com) on suspicion of fraud and misleading customers regarding payouts. Funded Engineer likely inflated its payouts by over $2 million to show great results and attract more traders.

FPFX Technologies announced that an audit of Funded Engineer's activities revealed suspicious activities lasting at least several months. Funded Engineer allegedly committed numerous frauds: create fake trading accounts, bypass AML/KYC procedures, engage in the so-called wash trading i generate fictitious payouts, to artificially increase its alleged turnover. The aim of these activities was to defraud FPFX Technologies, but also traders and trader candidates by presenting inflated payout data in order to attract more customers to their company.

How Funded Engineer worked

As part of the audit, FPFX Tech found that Funded Engineer employees were simply manually adding users in the admin portal who had no payment history or billing information. Funded accounts were created for them, bypassing the selection process. These actions are contrary to Funded Engineer's operating model, which requires traders to complete an investment challenge before receiving a real money account. Such rules are obvious in virtually all prop trading companies.

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Bypassing AML/KYC procedures and the so-called wash trading

Before receiving a funded account, all Funded Engineer traders must complete AML/KYC procedures, which is intended to protect both the trading firm and the broker against fraud. FPFX Tech claims that Funded Engineer manually disabled the AML/KYC system by approving fictitious people and assigning them funded accounts. Funded Engineer employees then logged into the client terminal and traded in the simulation environment with the sole purpose of making a profit on their account. If trading activities were not profitable, Funded Engineer would simply create a new account and start over.

Fictitious Payouts and FPFX Tech's Reaction

The audit revealed that Funded Engineer made no withdrawals to these fictitious accounts. It approved withdrawals in the system and pretended to pay for them using cryptocurrency wallets and global withdrawal processing companies. However, an overview of the activity blockchain did not show any corresponding transactions to these wallets.

“It is unfortunate that a company like Funded Engineer would engage in activities that appear to be fraudulent towards FPFX Tech, which has been instrumental in Funded Engineer's growth in the prop trading space. More importantly, they were mainly concerned with misleading unsuspecting traders looking for trading opportunities. To ensure the growth and survival of the prop trading industry, good practices and ethical actions must prevail. We will continue to play our role in ensuring that licensees of our technology behave appropriately.” – emphasizes Justin Hertzberg, CEO of FPFX Tech.

FPFX Tech plans to file complaints with regulators and inform other related entities that have their own independent AML/KYC obligations. Of course, FPFX also withdraws the license from Funded Engineer.

About FPFX Technologies

FPFX Technologies is a technology company serving the prop trading industry, supporting over 140 trading companies and 2 million traders. It offers Prop Trading Tech Kit, i.e. comprehensive automation that supports the service and administration of trading companies. It gives you the ability to develop custom prop trading plans, automatic account creation, account, risk and policy monitoring, automatic liquidations and notifications, and even live broadcasts, trading competitions and investor dashboard.

Are regulations in prop trading necessary?

The prop trading industry is not regulated in most regions of the world. This gives a lot of freedom to companies operating in this industry, but on the other hand, it creates a number of risks - primarily for customers and partners of these companies. In 2023, a great scandal broke out, where the second largest company in the industry, MyForexFunds (MFF), was liquidated practically overnight by the American CFTC supervision after the discovery of multi-million embezzlement of funds. We didn't have to wait long for another scandal, and it certainly won't be the last we hear about.