Prop firms to avoid (2026)
These prop firms are excluded from our directory — because they collapsed, changed rules after traders paid, sat on payouts, borrowed a trusted brand’s name, or fall short of our payout-reliability bar. We document why instead of quietly dropping them, because a list that only shows survivors hides the most useful information. 25 firms are flagged as of June 2026.
How to read this: “Flagged” means not recommended for new evaluations — it is not a blanket fraud accusation. Firms are grouped by what went wrong, and each card states the specific reason. Firm situations change; verify against the firm directly before drawing conclusions.
Payout fraud or withheld funds (4)
Took evaluation fees or showed approved profits, then froze, denied, or never paid withdrawals.
Impersonation & brand-borrowing (2)
Cloned a trusted brand, or borrowed an unrelated company’s history and payout numbers to look established.
Collapsed, leaving traders short (3)
Shut down while still holding trader funds, honoring only partial refunds, or after changing rules on paying traders.
Ceased operating (4)
No longer running or accepting traders. No major fraud alleged — but no recourse either, and resold evaluations may still circulate.
Can’t be verified (3)
Still operating, but the data needed to trust them can’t be confirmed — manipulated reviews, sub-par ratings, or ownership tied to a failed firm. Not proof of misconduct.
Use caution (8)
Still operating, but short of our recommendation bar — mixed reviews, payout caps in early cycles, or slower withdrawals. A “watch your step,” not a fraud allegation.
Closed responsibly (1)
Wound down cleanly — refunds issued, closure handled as a managed event. Listed only because it’s no longer available.
Where to look instead
For firms that clear the bar — 12+ months operating, a verifiable trader base, no non-payment cluster, and rule stability — start with the firm directory, see real costs on the deals page, or take the 60-second quiz to get matched.
Common questions
How do you decide a firm gets flagged?
A firm is flagged when it fails our inclusion test: a credible cluster of non-payment complaints, retroactive rule changes after traders paid, a shutdown or wind-down, or brand-borrowing. Inclusion is editorial and never paid.
Does flagged mean the firm is definitely a scam?
Not always. Some firms here shut down responsibly, some had payout disputes, some borrowed a trusted brand name, and some simply fall short of our payout-reliability bar without any fraud alleged. We document the specific reason for each rather than lumping them together.
A firm I use isn’t listed here — what does that mean?
It may simply be too new or too small to have a verifiable track record yet. Absence isn’t an endorsement or a warning — check the firm directory for what we actively recommend.
Editorial list, not legal advice. Reasons reflect publicly reported events and our own tracking as of June 2026; firm circumstances can change. Verify current status with the firm before acting.