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Legal

Risk notice

What a prop challenge is, why most participants do not pass, and the risks of the fee, the simulated account and the lack of supervision.

Draft, not yet reviewed by a lawyer.

This text follows the legal guardrails of our project plan but has not yet been reviewed by a lawyer. Your purchase is always governed by the terms of the prop firm concerned.

The essentials first

Prop challenges are paid evaluation programmes, mostly on simulated accounts. Most participants do not pass: in an analysis by FPFX Tech covering about 100,000 traders at 10 firms, about 14% of traders passed and about 7% received a payout (Finance Magnates, 18 Sep 2024; methodology not disclosed, FPFX sells software to prop firms).

The firms are generally not supervised by FINMA, BaFin, the FMA or the FCA. There is no investor or deposit protection and no ombudsman. The Financial Commission is a private dispute-resolution body, not a regulator.

Firms can change their rules unilaterally and are often the counterparty themselves. Austria's FMA compares paid challenges to the relationship between a player and a casino.

The fee is usually lost

You pay for participation, not for an account. If you break a rule — daily loss, max loss, consistency rule, a forbidden strategy — the challenge ends and the fee is, as a rule, gone. Resets and re-purchases cost again. Before buying, use the cost calculator and the repeat-attempt calculator to see what it can cost you in total, and only buy with money you can afford to lose.

"Funded" usually means simulated

At most firms the account after passing is a simulated account too. What is paid is a profit share under the firm's rules, not a trading profit on your own money. Simulated profits and payout amounts are not real trading results. That is why we call simulated accounts by their name and put "funded" in quotes.

Rules change

Firms change rules, prices and payout conditions often. Some changes apply only to new purchases, others to existing accounts too. We show rules with a date and, where the firm states it, with "applies to purchases from". The terms in force at the time of purchase always govern.

Firms close

Prop firms close, pause sales or stop payouts. According to FM Intelligence, an estimated 100 prop firms ceased operations between early 2024 and late 2025 (Finance Magnates, 1 Jul 2026). When a firm closes, fees and open payouts are often lost.

  • Crypto payments cannot be charged back.
  • Check when a firm verifies your identity (KYC). If it only checks before the first payout, you may only then learn that your residence or documents are not accepted.
  • Check country exclusions before you buy.

Leveraged products

Many challenges are traded with CFDs on currencies, indices, commodities or cryptocurrencies. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Futures are leveraged instruments too.

What regulators say

Check for yourself

You can check yourself whether a firm or a company in its group is on a warning list or holds a licence. A listing is not proof of wrongdoing; a regulated group company does not make the challenge regulated.

Taxes

Whether and how payouts from prop programmes are taxed depends on your residence and situation. PropCrab gives no tax advice.

Not investment advice

PropCrab provides information, not investment advice or recommendations. 18+.

Last updated: 29 October 2026