FPFX Technologies, also known as FPFX Tech, recently decided to terminate its licencing agreement with a prop firm called Funded Engineer. The retail prop trading tech provider’s decision came after an internal audit of Funded Engineer, which unveiled what the vendor claims is a months-long scheme designed to deceive both FPFX Tech, as well as the public.
According to FPFX Tech’s explanation, Funded Engineer’s scheme revolved around inflating payout figures through illicit activities. However, it was revealed by a probe that identified multiple fraudulent actions that Funded Engineer had conducted.
Some examples of illicit activities include bypassing AML and KYC protocols, creating fake trading accounts, generating false payouts, and engaging in wash trading. Each of these actions was conducted to purposefully overstate the company’s payment activities, and in doing so, mislead both the traders and FPFX Technologies.
What else did the probe uncover?
Some of the audit’s specific findings have revealed that Funded Engineer has manually created fake user profiles within the company’s administrative portal. These fake accounts did not have any billing details or payment histories. Instead, they were directly provided with funded accounts, allowing them to bypass the regular requirements needed for traders to complete a challenge before they could open such accounts.
FPFX Tech also found that the company managed to manually override the AML and KYC checks, which allowed the new accounts to receive approvals to be funded without standard due diligence. Not only that, but Funded Engineer’s personnel was found to be involved in wash trading, which is a practice of making trades with no economic substance. Their purpose is simply to mislead the public, and inflate the company’s own payout statistics.
The audit unveiled even more, including the fact that the company did not disburse any funds to these fake accounts, despite approving payments to them. Instead, Funded Engineer pretended that it made crypto payments using digital currency wallets and global payroll services, but with no corresponding transactions recorded on blockchains.
In the end, the probe concluded that the prop firm had overstated its payouts by a massive amount that exceeds $2 million, which is something that the company even had one of its founders, Tristan Talbot, promote on X.
FPFX Technologies to notify the authorities
Commenting on the findings, FPFX Tech’s CEO, Justin Hertzberg, said that it is highly disheartening to find a company like Funded Engineer engage in activities clearly meant to defraud FPFX Tech, especially given the fact that FPFX Tech was instrumental in the prop firm’s rise. More importantly, he noted that Funded Engineer had misrepresented material facts to unsuspecting traders in order to create trading opportunities.
“To ensure the growth and survival of the prop trading industry, good actors and ethical practices must prevail. We will continue to do our part to ensure licensees of our technology conduct themselves accordingly,” he concluded
While Funded Engineer has yet to respond to the findings and allegations, FPFX Technologies said that its next step is to alert regulatory authorities and notify other vendors who might be affected by the prop firm’s actions.