Singapore-based Prop Trading firm MPFunds has now ceased operations

Singapore-based proprietary trading firm MPFunds has announced its closure. Known for branding itself as Asia‘s first modern prop firm, MPFunds has ceased operations due to unforeseen financial challenges. An open letter from Dean Wong, the company's founder and CEO, was posted on the firm’s website (mpfunds.com), shedding light on the situation.

Dean Wong's Statement

According to Wong‘s letter, MPFunds’ sudden closure is attributed to its bank terminating all services without explanation. The timing couldn‘t have been worse for the firm, as a planned Series-A funding round scheduled for September 11, 2024, fell apart. Wong indicated that the financing was essential for the company after it discovered “suspicious activities” among users who allegedly exploited the platform’s systems.

Industry Challenges and Regulatory Pressure

MPFunds joins a growing list of proprietary trading firms that have shut down in recent months, including Fund for Traders. The closure of these firms highlights the intense competition in the industry, especially among companies that sell trading “Challenges” to retail traders. These challenges promise the chance to manage a funded account in exchange for passing a rigorous evaluation process.

However, the model has come under scrutiny from both regulators and trading platform providers. Some firms face stricter regulatory oversight, particularly in financial hubs like Singapore, where authorities are paying closer attention to retail trading operations. Theres also mounting pressure from platform providers, who are tightening their controls on how trading technologies are used. Combined with fierce competition, these factors make it difficult for firms like MPFunds to survive.

Affiliates Left in the Dark

The closure of MPFunds took its affiliates by surprise. Many of these affiliates are responsible for promoting and selling the firm‘s trading Challenges, earning commissions for their efforts. One such affiliate, PropFirmMatch, a prop firm comparison site, expressed shock over the sudden shutdown. In a statement posted on X (formerly Twitter), the site acknowledged the situation and voiced concerns for traders and affiliates impacted by the abrupt end of MPFunds’ operations.

Conclusion

MPFunds‘ shutdown is a reflection of the current challenges faced by the proprietary trading industry. With growing regulatory scrutiny and increased competition, firms relying on a retail trader-driven model are struggling to remain afloat. For MPFunds, a combination of banking issues, suspicious user activity, and a failed fundraising round sealed its fate, marking the end of what was once touted as Asia’s first modern prop firm.

As the industry grapples with these challenges, traders and affiliates are left wondering which firm might be the next to fold.