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Not so long ago, we spoke to James Glyde from PipFarm about the problems props face from scammers.
The basic model is that you pay a bunch of shady people who take your challenge for you. Typically they will just do reverse trades at different firms at the same time to game the challenge system a prop uses.
Another component of this Soprano-esque business model, which we did not discuss as much, are social media profiles that are weaponised to attack props that don’t pay out to scammers. If a prop is targeted, the profiles will go after them, accusing them of defrauding clients.
This primarily takes place on X, where – somehow fittingly to my mind – much of the discussion about props takes place. Looking more into this though, these accounts go beyond simply being a part of the prop mafia team.
Several accounts that have large followings, and which purport to be ‘newsfeed’ type accounts for the industry, engage in something akin to extortion.
This came to my attention after it was brought up on three separate occasions, without prompting on my part, by individual prop company executives. After speaking to two more, they confirmed that they have faced a similar set of problems.
What are they?
At the heart of it all is the fact these channels invent bad stories about props. This often appears to be coordinated activity, although, given the anonymity of the account owners, it’s hard to say if that’s really the case.
“We have been hit with negative ‘backlash’ by [several channels] for literally nothing at all on a couple of occasions,” said a senior executive at one prop firm. “We just push on and continue to run a clean business.”
Every prop executive noted that the channels would ask for payment in return for taking down negative posts. Marcus Fetherston, General Manager of Blueberry Funded, told me that one account also refused to take down a story they knew was fake because it had already gained a lot of traction.
“While there is a vibrant and supportive community on X within the prop and CFD trading space, we’ve come to realize that some so-called ‘community pages’ are not operating with traders’ best interests at heart,” said Fetherston.
“We’ve observed coordinated misinformation being spread about prop firms, with some pages only removing such content if paid to do so. This is not one specific page but a broader trend we see. In some cases, even after posts are proven false, they remain online simply because of the engagement they generate.”
Who is doing it?
The accounts in question include Prop Firm Eye, Prop Firm Squad News, and Prop Firm Media, among others. All are on X and Telegram. Yes there is something very ‘prop’ about all of that too.
Regardless, it’s hard to figure out who actually operates the accounts as they are all anonymous. However, one theory that almost all the executives that I spoke to had was that they are actually run by rival props.
Proving this is basically impossible and so – unfortunately for you – we won’t name names. However, it is notable that a couple of props never seem to suffer the same sort of ‘bad press’ that their peers do, although that could also be because they paid their protection money on time.
Another interesting point to my mind is what this says about prop. Partly it reflects the wild west, nascent stage that the industry is at. A lack of regulation, for example, means it is hard to sort the good from the bad. Long may that continue.
However, there is something slightly ‘crypto’ about the prop industry too.
One of the features of crypto that I have found historically is that it tends to have a very bottom up, hyper engaged audience, who are really interested in the features, products, or other facets of a specific crypto project. This is something you don’t find in regular markets. Lots of people might be obsessed with the latest meme coin but very few are going to be as fanatical about Vodafone shares.
Prop seems to be quite similar. Indeed, the industry’s success has largely been because of online communities. No prop has done any of the sort of large-scale marketing that brokers do, for example.
The result is that the public image of a prop firm can be swayed much more easily by these random scam people than it could in the broker space. For example, it’s hard to see a forum, Telegram channel or X channel causing serious damage to the reputation of a broker. The more community-driven, bottom up nature of props means that they can be hit by these guys.
Having said that, two prop executives that I spoke to, who asked to stay anonymous, noted that they had just stopped engaging and nothing terrible happened. It was annoying to see the lies still out there but end traders were still coming through the door. Maybe it’s best to just ignore the trolls?