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“Aren’t prop firms full of scams?” “What if I pass but can’t withdraw the earnings…”
Do you have these concerns?
In fact, these concerns are not unfounded. In 2023, the major prop firm MyForexFunds suddenly closed down, leaving an estimated over 800 million yen in unpaid earnings to traders. In 2024, MyFundedFX suffered the same fate.
While the prop firm industry is rapidly growing, the reality is that more than 100 companies have been established between 2020 and 2025, and around 30 of them have faced closures or withdrawal issues.
However, don’t worry. By checking the “5 Checkpoints” we’ll share today, you can spot 99% of fraudulent companies in advance.
In this 6th installment of the Prop Firm Textbook series, we’ll thoroughly explain how to identify trustworthy companies and specific ways to avoid scams. We’ll focus on Fintokei, which is popular among Japanese traders, to learn the criteria for choosing a safe company.
- Proper way to verify withdrawal track record (using Trustpilot, X, Reddit)
- 3 criteria to check the transparency of the operating company
- Characteristics and warning signs of fraudulent companies
- How to pre-evaluate the quality of Japanese language support
- Lessons learned from actual fraud cases (MyForexFunds, MyFundedFX)
- Reasons for selecting 3 trustworthy prop firms
▼ Click here to learn through a video ▼
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Prop Firm Textbook Vol. 6 “Criteria for Choosing a Company | 5 Checks to Avoid Scams”
Why Choosing a Prop Firm Company is Important – Understanding the Industry Reality
To succeed with a prop firm challenge, choosing the right company is just as important as trading skills. No matter how excellent your trading skills are, if the company you choose is fraudulent or suddenly closes down, all your efforts will be in vain.
The Harsh Reality of the Prop Firm Industry
Let’s first confirm the reality of the prop firm industry with some data.
- Number of companies established: Over 100 (estimated)
- Completely shut down: About 15 companies
- Withdrawal issues: About 10 companies
- Sudden rule changes that caused outrage: About 5 companies
- Total estimated losses: Over 1 billion yen
Why are there so many issues? The reason lies in the low barrier to entry for the prop firm business.
3 Reasons Why There Are Many Scams
①Low entry barrier
The trading system of prop firms can be outsourced. Even without technical expertise, anyone with capital can call themselves a “prop firm company”.
②Lack of regulations
Prop firms do not hold customer funds, so many countries do not require a financial license. This is a favorable environment for fraudulent operators.
③Can collect funds upfront
The business model allows them to collect an “evaluation fee” from traders upfront. In the worst case, they can simply collect the evaluation fees and run.
Choosing the Wrong Company Renders Everything Useless
To succeed with a prop firm, both of the following are necessary:
- Trading skills (profitable strategies, risk management, mental management)
- A trustworthy company (withdrawal track record, transparency, support quality)
No matter how skilled you are at trading, if you choose the wrong company, your profits will be zero. In fact, you might even end up losing the evaluation fee.
Keep this phrase in mind and let’s learn the 5 Checkpoints we’ll introduce now.
【Check①】Thoroughly Investigate the Prop Firm’s Withdrawal Track Record
The most important checkpoint for identifying a trustworthy prop firm is verifying the withdrawal track record.
“Can I really withdraw the earnings?” This is the biggest concern, right? Fortunately, in the current era, you can investigate the withdrawal track record quite accurately by utilizing 3 platforms.
①Verifying on Trustpilot
Trustpilot is the world’s largest review platform. To check the reputation of prop firms, start here.
【Steps】
- Access trustpilot.com
- Enter the “company name” in the search bar (e.g., “Fintokei”, “FTMO”)
- Check the following items on the company page
【Key Points to Look For】
- Overall Score: 4.0 or higher is the target (out of 5 stars)
- Number of Reviews: 500 or more for higher reliability
- Reviews containing “Withdrawal”: Look for specific reports on withdrawals
- Trend of the latest 3 months’ reviews: Ensure there is no sudden drop in ratings
- Companies with overly high scores (4.9 or above) may have self-generated reviews
- Be sure to also read the negative reviews
- If there are few Japanese reviews, check the English reviews as well
②Verifying on X (former Twitter)
On X (former Twitter), you can check real-time withdrawal reports. Actual traders often post screenshots of their withdrawals, which is very helpful.
【Example Search Keywords】
- “company name payout”
- “company name withdrawal”
- “company name 出金” (Japanese for “withdrawal”)
- “Fintokei 出金 proof”
【Key Points to Look For】
- Number of withdrawal reports: The more, the better
- Presence of screenshots: Evidence of specific cases
- Days from withdrawal to arrival: Typically 3-7 business days
- Presence of complaint reports: Look for “can’t withdraw” comments
③Verifying on Reddit
Reddit is a large overseas forum, and it’s the platform where people are most candid. Due to its high anonymity, both positive and negative opinions are written frankly.
【Relevant Subreddits to Check】
- r/proptrading
- r/Forex
- r/FundedTrading
【Key Points to Look For】
- Detailed first-hand accounts: Look for specific anecdotes
- Multiple people reporting the same problem: Not just one person, but multiple voices
- Company’s response: Check if the official account is responding