MPFunds, a Singapore-based proprietary trading firm, has announced its permanent shutdown. The company cited ongoing regulatory problems and banking difficulties as the main reasons for its closure. FundedTrading.com breaks down what happened and what it means for traders.
MPFunds Announces Permanent Closure
MPFunds officially ceased operations on September 10, 2024. Dean Wong, the Founder and CEO, posted an open letter on the company’s website and social media accounts, apologizing to clients, traders, and the hardworking team for the sudden closure.
Why MPFunds Had to Shut Down
Strict Regulations in Singapore
One major reason for MPFunds closing is Singapore’s tough regulatory environment. Dean Wong explained that the local laws made it increasingly hard for the company to continue operating. The situation worsened when their bank suddenly ended their services without a reason. The bank refused to reopen their account despite providing all necessary documents and trying to appeal the decision. This left MPFunds without the financial support it needed to keep running.
Banking Problems and Funding Issues
Losing their banking partner had a severe impact on MPFunds’ finances. Additionally, a crucial funding round that was supposed to help stabilize the company fell through. Attempts to find other financial backers were unsuccessful, adding to the financial pressure and making it impossible for MPFunds to stay afloat.
Suspicious Trading Activities
Dean Wong also mentioned an increase in suspicious and prohibited trading activities by some users. These activities hurt the company’s reward system and caused financial losses. After investigating, MPFunds found that a small group of traders exploited the platform, further damaging the company’s reputation and finances.
Effects on Traders and Clients
The sudden shutdown has left many traders and clients uncertain about their investments. Reports indicate that MPFunds continued accepting funds until the closure announcement, raising concerns about how client money was managed during this period. This situation highlights the need for transparency and strong financial practices in the prop trading industry.
About MPFunds
MPFunds, founded by Dean Wong, operated under the legal name MYPOCKET FUNDS PTE. LTD (Company Number 202230915H) paid out over $1 million to traders over its one-year operation. The firm offered a two-phase challenge account with funding up to $200k and a maximum allocation of $1,000,000. Additionally, MPFunds provided educational resources and coaching to help traders improve their skills.
Lessons for the Prop Trading Industry
The closure of MPFunds serves as an important lesson for other prop trading firms:
- Follow Regulations: Firms must comply with local and international laws to avoid legal issues and maintain operations.
- Secure Banking Relationships: Maintaining strong relationships with banks and having multiple financial partners can help prevent sudden financial disruptions.
- Monitor Trading Activities: Implementing effective risk management and monitoring systems can prevent misuse of the platform and protect the company’s financial health.
Conclusion
MPFunds’ shutdown highlights prop trading firms’ challenges in a strict regulatory environment. While MPFunds made significant contributions by supporting traders and providing valuable resources, regulatory pressures and financial mismanagement led to its closure. For other prop trading firms, MPFunds’ experience underscores the importance of compliance, solid financial practices, and vigilant monitoring to ensure long-term success.
As the prop trading industry grows, firms must prioritize transparency, adhere to regulations, and implement strong risk management strategies to build trustworthy and resilient trading platforms.
