A funded forex account, also known as a “funded trader” or “prop-firm account”, is a commercial arrangement where a firm provides trading capital to a trader who has demonstrated an ability to trade within the firm’s rules and passed certain requirements. This article is not about a normal forex account that you have “funded”, i.e. deposited money into yourself.
Many different types of funded accounts (prop-firm accounts) exist, but a common model is where the trader executes trades using the firm’s capital, and receives a share of any profits if they meet the profit targets and respect drawdown limits. Typically, the trader must deposit some of their own money first before any trading can start, e.g. by paying a qualification fee or by funding initial trades until certain criteria has been met.
For an aspiring trader with a small budget, a funded program can look very appealing. These accounts are usually marketed as fast route to scale, and a better opportunity that trading your own meager capital and building your account balance gradually. The promise is attractive, but the practical reality is more nuanced and, requires careful verification of how the program interfaces with local regulation, bank rails, and tax rules. There are also quite a lot of scammers active in this industry, and marketers and paid influencers who paint a very rosy picture that do not match the realities of the funded program.
Never allocate more than a very modest portion of your tradable capital to evaluation fees and initial funded activity. This keeps you flexible if the relationship proves unsuitable.
What a funded forex program typically looks like
A typical funded program begins with an evaluation phase. You trade in a simulated or monitored environment under rules set by the firm. Typically, the rules will include a maximum daily loss, overall drawdown limit, required minimum number of trading days, and a profit target to qualify for a funded account.
If you pass the evaluation the firm credits a live trading account with company capital. Profit splits vary and you need to read the fine print. Common arrangements are 70/30 or 80/20 (trader share first). The exact split is defined in the contract, but make sure you are also aware of any additional costs or cuts that would reduce your actual profit.
Firms sometimes offer scaling plans so that consistent performers can handle larger capital blocks over time. Sometimes, the lure of larger capital blocks and better conditions ahead keep traders from cutting their losses and leave as they struggle on a lower rung where conditions are poor.
Trading and execution is usually through a broker chosen by the prop firm or through proprietary infrastructure the firm operates. Your fills, slippage and access to instruments will reflect the firm’s chosen provider. You are not free to pick the best broker and platform for your particular strategy, although some programs will let you trade through mainstream retail platforms (MT4, MT5, cTrader). Some firms route through bespoke APIs or institutional interfaces with excellent execution quality, while others provide you with a below-average solution that can reduce the profitability of your trading. Since the firm controls the brokerage relationship, the venue settlement rules may differ from what a retail trader would experience. That can affect things such as execution quality, ability to hedge, product availability (some prop firms limit instruments), and the practicalities of converting profits into local currency.
The live funded account will usually carry strict risk controls, including daily, intra-day and run-of-account drawdown limits that, if hit, can terminate the arrangement or reduce your profit share. Those rules exist because the firm supplies capital and needs to manage exposure across all traders. Make sure you read the fine print and evaluate if the rules are fair or if you are dealing with an exploitative firm.
Typical steps to qualify for a funded account
- Sign up and pay an evaluation fee. (Although some firms have no evaluation fee.)
- Go through and evaluation phase where you must meet profit targets, take limited drawdown, fulfill minimum trading days, and adhere to all the other rules.
- Verification. The firm reviews trade logs and compliance checks.
- Funding. If you pass, the firm provides a funded account and you trade under firm rules. Profits are split per contract terms. Terms differ widely between firms.
Withdrawals
You do not usually have unilateral withdrawal access to the funding capital, and withdrawals are limited to the part of the profits that have been transferred to you after verification. The firm may require periodic performance reports, trade logs and identity verification before releasing profit payments. Settlement cadence varies. Some firms make your share available monthly, others on a defined schedule or after you request withdrawal subject to review.
In Kenya, where local payment rails such as M-Pesa and domestic bank transfers are heavily used by retail traders, confirm that the prop firm can pay out to Kenyan bank accounts or via local rails before you egage. Otherwise, you may face expensive intermediated conversions or withdrawal friction.
The Kenya context — regulation and why it matters
In Kenya, the Capital Markets Authority (CMA) is the regulator that licenses and supervises online forex brokers and related capital market intermediaries. The CMA issues licenses for dealing and non-dealing brokers and for money managers, and regulate how online forex services must handle client funds and conduct business in the market. A broker without appropriate CMA recognition exposes Kenyan clients to limited recourse in the event of a dispute. That’s an important distinction. Trading with an entity that promises a funded account, but which does not comply with Kenya’s licensing and fund custody rules, increases your operational risk. If something goes wrong and the firm refuses to honor their obligations, the CMA and the rest of the Kenyan justice system can not do much if the company is based in another country, and especially not if that country is an offshore paradise known for its lax approach to broker supervision and trader protection.
The CMA emphasizes client protection. Among other things, CMA regulated brokers must segregate client funds in local bank accounts, meet capital adequacy requirements, submit to reporting, and subject themselves to audits. The regulator has repeatedly warned the Kenyan public against using unlicensed brokers and platforms. Using such brokers and platforms increases the risk of running into manipulated price feeds, opaque terms and conditions, and companies that make withdrawals difficult or vanish entirely.
Are prop firms regulated by the Capital Markets Authority (CMA) in Kenya?
Prop firms that simply fund traders and do not hold client deposits or operate as brokers are generally not licensed as brokers by the CMA. That means the prop firm model itself often sits outside the specific CMA licensing regime for online forex brokerage. However, the broker that actually executes client trades or holds client funds must be CMA-licensed if it accepts Kenyan clients, even if those clients are prop traders using prop firm money. Ask the prop firm which broker that will execute your trades and have custody, and verify that broker’s status directly with the CMA.
Examples of things to watch out for before you sign up
Regulation
The mechanics that make funded accounts appealing, including corporate capital, leverage, and the possibility of fast scaling, also create hazards. First and foremost, check whether the prop firm or its broker partner is regulated in Kenya. If not, check if it is regulated in another jurisdiction with strong trader protection rules. Still, there mere fact that an entity is onboarding Kenyan clients without the required CMA license is cause for concern. If they are willing to break Kenyan rules in this regard, what else are the willing to do?
Anyone fraudster can lie and claim they have a CMA license, so you need to verify directly with the CMA. Ask the prop firm which broker will execute your trades, and confirm that broker’s status on the CMA register if the firm claims a Kenyan presence. If the the prop firm uses an offshore broker, and you decide to proceed anyway, probe how profits are paid out to Kenyan shilling accounts, what fees and costs apply to currency conversion, and what legal recourse you have if the firm refuses withdrawal.
Withdrawals and currency management
Ask whether local payment rails such as M-Pesa or Kenyan bank transfers are supported, and whether the firm requires you to route payments through third-party processors that add cost. Confirm the exact profit withdrawal process to your Kenyan bank or M-Pesa.
Prop firm accounts are normally not denoted in Kenyan shillings. Unless your plan is to withdraw money to your USD or EUR account, find out how profits will be converted to Kenyan shillings, and whether the firm will withhold any taxes before sending you funds. In Kenya, your documentation and reporting obligations may differ if you receive trading income from foreign entities, so get clarity before you commit.
If this is a prop firm where you need to start out by trading your own money to qualify, test operational paths early. Fund a small live account, pass the verification step, trade, then request a small withdrawal. The round trip can reveal friction points, such as undue delays, identity verification hurdles beyond the norm, and unexpected fees.
The contract
Understand the evaluation and risk rules in detail, including permitted instruments, max position sizes, allowed order types, intraday and overnight rules, and how the firm treats event-driven gaps or forced liquidations. If a rule is ambiguous ask for written clarification. Verbal promises rarely survive a contested payout. Read the fine print on profit sharing and profit withdrawals. Many programs impose a long row of conditions, such as minimum payout thresholds or complicated fee structures (administration fees, platform fees, performance-related clawbacks, etcetera). You also need to understand how AML routines, KYC routines, and tax paperwork will impact your ability to withdraw.
Execution quality and market access
Evaluate execution quality and market access. Prop firms often specify the broker used and the data feed. Test the broker yourself with a small deposit if possible. Slippage, re-quotes, and latency vary by provider and will materially affect the edge you try to demonstrate during evaluation and thereafter. Some funded programs also limit certain instruments or restrict trading around news, and those rules impact a trader’s ability to meet profit targets.
Taxes
When it comes to tax and reporting, make sure you know how this type of trading income should be reported in Kenya. Depending on various factors, the income may be classified as business income, capital gains, or other taxable income. Research if you, from a tax perspective, will be considered a freelancer, an employee receiving commissions, self-employed, or an investor making capital gains. Consulting a local tax advisor or the Kenya Revenue Authority (KRA) can help prevent future problems. Always keep clean records of statements and timestamps, and record the fiat equivalent of any crypto settlements if the firm pays out in digital assets.
Things that are too good to be true
Be skeptical of overly generous terms. Promises of very large leverage, unrealistic return guarantees, or “guaranteed funded accounts” for a fee are common in marketing and often precede problems. A legitimate firm will provide clear, auditable trade records, transparent payout processes, and a realistic contract that aligns incentives between you and the firm.
Fraud patterns
Many of the problems commonly seen with offshore brokers in lax jurisdictions carry across into prop firms, including opaque corporate structures, withdrawal friction, opaque terms, sudden changes to terms once you are profitable, and account freezes requiring additional documentation (way beyond what´s required by AML and KYC regulations) or even deposit to unlock funds.
Offshore entities in lax jurisdictions can be legitimate, but the combination of distance, differing legal regimes, and very limited Kenyan regulator powers makes remediation slow or impossible if things go wrong. By contrast, a firm with a local presence provides clearer dispute channels. In Kenya, the CMA has the mandate to act against unlicensed providers targeting Kenyan clients. If a funded program cannot show how it complies with local rules, that should be a major warning sign in itself.
Examples of contract clauses to read extra carefully
Clauses about profit split timing, termination for breach, responsibility for negative balances, data retention, trade record ownership, and jurisdiction for dispute resolution. Many firms include arbitration clauses or appoint an offshore jurisdiction for disputes, and that can make legal action slow and expensive. Prefer firms that allow disputes to be heard under a jurisdiction you can practically litigate in. You want access to a clear escalation procedure. For traders in Kenya, the most feasible choice is a CMA-licensed company.
Risk management when trading a funded account
Because funded programs place sharp limits on drawdowns, risk management must be adjusted to account for this. Manage position sizing so that a string of losing trades does not trigger a forced exit from the program. Many funded traders use fixed fractional risk per trade (a small percent of the funded account) and maintain a strict maximum daily loss threshold well below the firm’s official limits, so human error or unexpected volatility doesn’t eliminate their chance to continue and scale.
Avoid strategies that rely on excessive leverage or back-to-back, high-frequency entries unless the program explicitly supports those tactics and your performance has been audited and proved sufficiently profitable in live conditions. When a firm supplies generous notional capital, it is often paired with a long set of rules. Your job is not to maximise short-term gain at the cost of violating a rule.
Keep detailed logs, including information about trade rationale, entry and exit timestamps, and evidence of rule compliance. That log is your defense if the firm later disputes a profit claim. It will also be easier for you to spot if a company is dishonest and cut your losses, instead of letting the firm gaslight you into believing their version of events.
Notional capital
Notional capital is the headline or face value of capital a trading firm assigns to your account for the purpose of position sizing and exposure limits, and this is normally not the amount of real cash you can lose or withdraw. The notional capital is the theoretical amount of capital your trades are measured against in prop-trading environments.
Example: A firm might give you $100,000 in notional capital and you are allowed to place trades as if you had a $100,000 account. But your actual loss limit might be only $2,000–$5,000. Risk rules (max drawdown, daily loss, position size) are calculated relative to the notional amount. If you violate a rule, even briefly, the contract typically stipulates that you will lose access, regardless of how much notional capital remains.
Prop firms use notional capital for several reasons. You get larger trade sizing power, but the firm still tightly controls the downside. Larger notional capital often comes with tight drawdown limits, a daily loss caps, and restrictions on holding times, scaling, and/or frequency. There is also a marketing perspective. “Trade a six-figure account” sounds attractive in marketing materials and help bring in prospective traders.
Example of how it can work:
- Notional capital is $100,000
- Max total drawdown is $3,000
- Max daily loss is $1,500
- Real capital at risk is circa $3,000
- Withdrawable profits: Only what is made accessible to you after the profit sharing rule has been applied, any costs have been deducted, and you have complied with the withdrawal rules.
Notional capital can be misleading, especially for inexperienced traders who do not understand the context. Treat notional capital as a constraint framework, not as money you actually have in your account.
Practical vetting checklist (do this before you pay any fees)
- Which broker executes trades? Verify that broker’s licence.
- How will profits be paid to a Kenyan account? Get the exact procedure in writing.
- Read contract clauses on withdrawals, termination, and clawbacks. Don’t rely on verbal assurances. Don´t rely on marketing promises that are not a part of the actual contract.
- Check online feedback and complaints. Search for independent post-mortems or warning threads.
- Confirm KYC process and AML routines, and whether you must supply extra documents before withdrawal.
Examples of red flags that should make you walk away immediately
- No clear broker partner or evasive answers on execution and custody.
- Complex “bonus” conditions that prevent withdrawals until you trade an unrealistic volume.
- Promises of guaranteed funded accounts after a single fee.
- Unclear or punitive dispute resolution clauses (e.g., only in distant offshore courts with no practical access).
- Numerous unresolved customer complaints about withheld withdrawals.
FAQ — Funded trading / prop trading in Kenya
What is a funded trading (prop trading) account?
The typical funded account is a commercial arrangement where a firm (the prop firm) provides an independent retail trader with trading capital after the trader pass an evaluation stage or challenge. The trader trades the firm’s money under risk rules set by the firm. If the trader hits the profit targets and stay within drawdown limits and follow all the other rules, the trader gets to keep a share of profits (the profit split). The trader can only withdraw earned profits according to the payout schedule, and after completing the withdrawal requirements (including KYC and AML checks).
Important: The exact terms and conditions can vary a lot between different prop firms and prop accounts, so you need to check the fine print yourself.
Does the CMA allow online retail forex trading in Kenya?
Yes, but only with CMA-licensed brokers. The CMA has repeatedly warned the public against dealing with unlicensed online forex brokers and has issued cease-and-desist orders to unlicensed operators. Kenyan authorities are actively pursuing unlicensed outfits. Before signing with any firm, confirm CMA-licensing status and how the firm handles custody of funds.
How many CMA-licensed online forex brokers operate in Kenya?
As of early 2026, fourteen brokers hold a CMA-license for online foreign exchange (forex) trading services. You can find the up-to-date official list of licensees on the CMA website (cma.or.ke).
The CMA classifies online brokers primarily as non-dealing online foreign exchange brokers and dealing online forex brokers.
Thirteen of the currently licensed forex brokers are non-dealing online forex brokers, and only Empire FX Trade Ltd is listed as a dealing broker (market maker).
The non-dealing online forex exchange brokers:
- EGM Securities Ltd (FXPesa)
- SCFM Ltd (Scope Markets)
- Pepperstone Markets Kenya Ltd
- Exinity Capital East Africa Ltd
- HFM Investments Ltd (HF Markets)
- Windsor Markets Kenya Ltd
- Exness KE Ltd (Tadenex in some lists)
- Ingot KE Ltd
- Admirals KE Ltd
- FP Markets Ltd
- IC Markets (KE) Ltd
- Trademax Global Markets (KE) Pty Ltd
- TPXM Global Kenya Ltd
The dealing online forex broker:
- Empire FX Trade Ltd
Important: Do not rely on this information, since it can change rapidly. Always verify directly with the CMA (cma.or.ke).
If a prop firm isn’t using a CMA-licensed broker, is it automatically unsafe?
No. Not having a CMA-licens doesn’t automatically mean fraudulent. A broker can be registered in other countries and operate soundly. However, by accepting Kenyan traders despite not having a CMA-license, they are showing that they are willing to ignore Kenyan law, and that is a warning sign.
Lack of local regulation also removes an important layer of protection for trader. It can make dispute resolution slower and more costly, and increase practical withdrawal risks.
How do payouts usually work for Kenyan traders?
Firms differ and you should not assume that one particular prop firm will work the same way as another. It is very important to verify the terms and conditions in advance.
Examples of things to check out:
Will the prop firm pay monthly, or pay on request after verification?
Will payouts be in USD, KES, cryptocurrency, or something else?
How are currency conversions handled, and what are the costs?
Can you get your money to a Kenyan bank account or M-Pesa? Will you need an intermediary payment service?
What are the fees associated with currency conversions, transfers, intermediaries, etcetera?
What are the main risks for Kenyan traders?
Here are some examples of notable risks for Kenyan prop traders:
- Withdrawal friction or refusal (most common complaint).
- Hidden fees, surprise conditions, or sudden changes to the rules once you are profitable.
- Poor execution quality. The broker used by the prop firm may for instance have high spreads, re-quotes, or slippage that damages live performance.
- Lack of accessible legal recourse. If the firm is based in another country and operate without a CAM-license, enforcing contract terms from Kenya may be difficult and expensive.
- Tax and reporting complexity. Cross-border payments, crypto payouts, or opaque corporate structures can complicate tax compliance.
- Outright fraud. Some scammers simply take your evaluation fee and deposits, and you will never qualify to become a true prop trader. There will always be some new condition to ensure you keep “failing”, and you might also be encouraged to make additional deposits and keep trading to “prove yourself”. The carrot will always be just out of reach.
How should I manage risk while in an evaluation phase?
Treat the evaluation as live money. Use strict position sizing, respect the firm’s drawdown limits, and avoid high-leverage or illiquid instruments unless explicitly allowed. Keep a precise trade log to prove you followed rules (time stamped entries, platform screenshots, ticket IDs). Use modest stake sizes that preserve your ability to complete the evaluation even after a losing streak.
Taxes — do I need to declare funded trading income in Kenya?
Yes. Income from trading (including profits withdrawn from a prop firm) is taxable in Kenya. Classification (business income, employment-like income, capital gains) depends on circumstances. It can be a good idea to consult a Kenyan tax advisor before you start withdrawing material sums to structure reporting correctly and to avoid surprises.
Can a prop firm pay out in cryptocurrency?
Yes, some firms offer crypto payouts. Crypto can be fast and lower cost for cross-border transfers, but it adds volatility (the crypto value can fall before conversion) and tax complexity. If the firm pays in cryptocurrency, verify withdrawal chains, custody controls, and conversion options to Kenyan shillings.
Real-world fraud accusations involving prop firms
Nairobi-based trader allegedly lost 1,478 USD in profits when offshore prop firm blocked his payout
The risks of using prop firms through foreign brokers is not theoretical. One real-world example of how difficult it is to fight a foreign broker is this story that unfolded in October 2025, when a Nairobi-based trader reported losing USD 1,478 (about KSh 193,000) in profits after an offshore proprietary trading firm blocked his payout and deactivated his account moments after he attempted to withdraw funds.
According to the trader, who shared a detailed account with the blog and news website Nyakundi Report, he signed up for a funded account programme run by a company identified as VPropTrader. Over the course of a month, he traded gold (XAU/USD) in strict adherence to the platform’s risk and drawdown rules. According to internal records he shared with the news website, his trading remained within stipulated loss limits, and he ultimately generated a confirmed profit from a funded balance of USD 1,000.
After receiving confirmation that he met eligibility requirements, including a documented withdrawal request number, he began the withdrawal process. However, as soon as he moved funds from his trading terminal to the internal wallet in preparation for withdrawal, the platform displayed an error and instantly deactivated his account. In subsequent communication, the firm claimed the account was being closed due to “multiple linked accounts,” a justification the trader strongly denies. Logs and IP records reviewed by Nyakundi Report showed consistent single device access throughout.
The trader also noted a peculiar discrepancy. Before the deactivation, his gold trades were listed under the symbol “XAUUSD.w” on the trading platform, but after the account was suspended, the symbol appeared simply as “XAUUSD”. He suspects this may signal that the firm swapped his live account with a mirrored copy, severed from actual trading history. Efforts to engage with the firm’s support team were reportedly unsuccessful, with his dashboard and in platform chat access revoked soon after.
The incident shine a spotlight on the risks facing Kenyan traders who engage with foreign prop trading companies that operate outside the supervision of the Capital Markets Authority (CMA) and the Central Bank of Kenya (CBK). While this specific case concerns a single individual, many other Kenyan traders have described similar experiences with offshore prop trading firms. Common issues include traders who meet performance targets and compliance checks, only to find their accounts disabled or payouts blocked once withdrawal is requested. These patterns point to a structural imbalance in the relationship between traders and proprietary trading firms that operate under opaque terms and without going through a CMA-licensed broker. It also underscores the growing need for greater trader awareness and caution about engaging with foreign proprietary trading services that promise quick access to capital and profit sharing, but are using non-licensed brokers and operate with minimal external oversight.
Dubai-based prop firm “ThePropTrade” allegedly rejected $30,000 payout to U.S. trader despite trader compliance
In late 2025, a prominent complaint surfaced online involving ThePropTrade, a Dubai-based proprietary trading platform that markets itself as a funded account provider for active traders. A trader operating under the social handle @EdgedGambling on X (formerly Twitter) publicly alleged that the firm refused to honor a legitimate $30,000 payout and disabled his trading access despite strict compliance with all stated rules.
According to the trader’s account, his relationship with ThePropTrade began normally. He reportedly adhered to all of the firm’s published guidelines, managed risk appropriately, and generated significant profit on funded accounts. His earlier withdrawal of about $18,800 was processed without issue. However, when he achieved a larger profit of roughly $30,000 and requested a payout, the firm’s approach allegedly changed.
- The company introduced a new “1% maximum risk per trade” limit that was not previously listed in FAQs, terms, or communicated to traders.
- Despite the trader asserting he had complied with this rule, ThePropTrade reportedly denied the payout and deactivated both funded accounts he held.
- The trader further claimed that the firm’s CEO blocked him on Telegram, removed him from the firm’s Discord server, and revoked access to his trading dashboard. He also stated that previous chat messages with staff were deleted after the dispute began.
These allegations quickly gained traction in trading communities, with other traders expressing frustration about similar payout disputes with smaller or less transparent prop firms.
The trader’s complaint also suggests that his involvement with ThePropTrade went beyond ordinary participation. He claimed to have contributed significantly to the firm’s early sales, reportedly bringing in over $200,000 in business and helping build much of its initial client base through referrals and early adoption. In remarks shared online, he said he chose ThePropTrade partly because of the CEO’s purported decade of experience in the FX industry, as described on professional platforms such as LinkedIn. Initially, he viewed the firm as reputable, expecting longevity and payout integrity.
In responses to the trader’s online statements, other users and community members voiced concerns that this change in behavior (processing smaller payouts while rejecting larger ones) is a recurring complaint among newer or less regulated prop trading firms. Many suggested that some firms might honor early payouts to build trust, only to later avoid larger liabilities once traders become profitable. Some community posts also noted that ThePropTrade had discussed plans to launch new challenge models and trading platforms, and to potentially review its operations in several months with the possibility of refunds or payouts if issues didn’t improve. However, the trader expressed skepticism, asserting that conditions seemed to worsen rather than improve, and he doubted that promised integrations or future payouts would materialize.
As of the latest reporting, ThePropTrade has not publicly responded to these specific allegations. There has been no official statement from the firm addressing the trader’s claims about payout denial, account bans, or communication deletion.
This article was last updated on: January 29, 2026