Boca Raton, Florida-based FPFX Technologies announced that it has terminated the license of its customer, Dubai-based commercial products company Funded Engineer (at fundedengineer.com), due to an apparent scheme to defraud FPFX Tech and falsification of payment information to consumers.
FPFX Tech said that a periodic audit it conducted of Funded Engineer’s business activities revealed what FPFX Tech believes to be a multi-month scheme in which Funded Engineer created fake trading accounts, bypassed AML/KYC safeguards, engaged in in washing transactions and created virtual payments in order to inflate its payments business. The company said the purpose of the scheme was to deceive FPFX Tech and the public by representing payment numbers that exceeded reality as a way to attract more customers to their support company.
FPFX’s move marks the second time in as many days that a trading technology provider has cut one of its own trading firm’s clients. Just yesterday, FNG exclusively reported that leading trading platform provider MetaQuotes has terminated the MT4/MT5 platform licenses granted to True Forex Funds, a trading company based in Hungary.
FPFX’s allegations regarding the Funded Engineer include the following:
Fake accounts
Through the audit, FPFX Tech said it noticed that Funded Engineer manually created what appeared to be fake users in the technology management portal. These users had no payment history or billing details, but were immediately given funded accounts, which is contrary to the support company style offered by Funded Engineer, which requires all merchants to complete a challenge before receiving a funded account .
Bypass AML/KYC
Before a merchant receives a funded account, all Funded Engineer merchants must complete AML/KYC checks. This is to protect both the support company and the broker partner from onboarding any traders under false pretenses or who would not be able to open a brokerage account directly. However, according to FPFX, Funded Engineer manually replaced the AML/KYC system by approving these “individuals” for funded accounts.
Wash Trading
It appears that Funded Engineer staff then logged into the client terminal and traded in a simulated environment with the sole purpose of making a profit on the account. If the trading activity did not, the Funded Engineer would simply create a new account and start over. FPFX Tech believes that the trading activity served no purpose other than to defraud FPFX Tech and inflate Funded Engineer’s statistical payouts.
Fantastic payouts
Based on FPFX Tech’s review, Funded Engineer does not appear to have ever paid any money into these fictitious accounts. Rather, he authorized payments into the system and pretended to pay them through crypto wallets and global payroll companies. However, a review of blockchain activity yielded no such matching transactions in these wallets.
The audit revealed that Funded Engineer appears to have overstated its payments by more than $2 million, which was then forwarded by one of its founders, Tristian Talbot, to X’s account, Trader T.
Justin Hertzberg, CEO of FPFX Tech, was quoted as saying:
“It is disappointing that a company like Funded Engineer would engage in activity that appears to defraud FPFX Tech, which has contributed to Funded Engineer’s rise to the support space and, more importantly, misrepresenting material facts to unsuspecting traders who simply were looking for a bargain opportunity. To ensure the growth and survival of the branding industry, good factors and ethical practices must prevail. We will continue to do our part to ensure that our technology licensees behave accordingly.”
FPFX Tech said it plans to file complaints with regulators as well as notify other affiliated vendors that have their own independent AML/KYC obligations.
About FPFX Technologies, LLC
FPFX Technologies is a technology company serving the trading industry, supporting more than 140 companies and over 2 million unique traders. Prop Trading Tech Kit is built-in specification, end-to-end automation that supports the operation and management of proprietary trading firms/funded accounts. including the ability to develop custom trading plans, automated account creation, account monitoring, risk monitoring, rule monitoring, auto liquidation and alerts, email alerts, discount codes, live streaming, certificates, trading contests, partner portals, leaderboards and a custom chart trader control and CRM management portal.