# Are Prop Firms Legal in the US? A Founder's View

> Prop firms operate openly in the US, especially in futures, and no US rulebook specific to evaluation firms exists as of October 2026. That does not make every structure lawful. The CFTC's MyForexFunds case was dismissed in 2025 for the agency's conduct, not on the model's merits, and platform access for US traders has narrowed. Get US legal advice before accepting US residents.

- Source: https://pipvalley.com/guides/are-prop-firms-legal-in-the-us
- Publisher: PipValley - web design studio for prop trading firms
- Updated: 2026-10-12

**Short answer:** Prop firms operate openly in the US, especially in futures, and no US rulebook specific to evaluation firms exists as of October 2026. That does not make every structure lawful. The CFTC's MyForexFunds case was dismissed in 2025 for the agency's conduct, not on the model's merits, and platform access for US traders has narrowed. Get US legal advice before accepting US residents.

The US is the most valuable prop market and the most complicated one. Topstep, Apex and other futures firms are US-facing, and before MetaQuotes' 2024 action, nearly 30% of traffic to the top prop firms came from American traders, according to Finance Magnates. Serving that demand raises two separate questions: the legal one and the platform one.

> This page explains how things generally work and what we've seen running prop firms. It isn't legal, tax or financial advice. Rules differ by country and change often, so ask a lawyer or adviser in your jurisdiction before you act.

## What happened with the CFTC?

In August 2023 the CFTC froze MyForexFunds over alleged fraud. In May 2025 a federal judge in New Jersey dismissed the case with prejudice and awarded fees as a sanction against the CFTC's conduct. That ruling punished how the case was run. It is not a ruling that the evaluation model is lawful, and founders should not read it as one.

Since then, large US firms have moved toward registration. Topstep became an NFA-member introducing broker cleared by Plus500 in January 2026, and Finance Magnates reported in June 2026 that "large American prop firms are already beginning to seek registration with the CFTC".

## Which platforms can serve US traders?

Fewer than before, especially for CFD firms. MetaQuotes moved against prop firms with US clients in February 2024. Spotware stopped onboarding US traders to cTrader through prop firms from July 1, 2026, and firms moved them to Match-Trader, TradeLocker and Volumetrica. Futures firms use NinjaTrader Prop, Tradovate Prop, Rithmic front ends and others; ProjectX has been Topstep-only since February 28, 2026.

Our page on why prop firms ban US traders explains the commercial side of that decision.

## What should you ask a US lawyer?

- Does our product, as designed, raise a registration question with the CFTC, NFA or any state?
- Do we need the CFTC Rule 4.41 hypothetical-performance legend, and where?
- How should we describe payouts so they are not read as investment returns?
- Which platforms may we lawfully offer US traders, and on what terms?
- Should we exclude the US at launch, and how do we enforce that at checkout and KYC?

## Questions

### Can a non-US prop firm accept US traders?

Many do, but platform access has narrowed and the legal position depends on your structure. Get US legal advice on structure, disclosures and platforms before accepting US residents.

### Is it legal to start a prop firm in the US?

US-based prop firms operate openly, Topstep among them. Whether your specific product needs registration is a question for a US lawyer, and some large firms have chosen to register introducing brokers.

### Do US prop firm websites need a disclaimer?

US futures sites commonly carry the CFTC Rule 4.41 legend wherever simulated results or payouts are shown. Whether and where your site needs it is a question for your lawyer.

## Sources

- [Finance Magnates: Prop trading is finding its way back to the US, but can it beat futures dominance?](https://www.financemagnates.com/forex/prop-trading-is-finding-its-way-back-to-the-us-but-can-it-beat-futures-dominance/)
- [Willkie Compliance Concourse: New Jersey federal judge dismisses forex case with prejudice](https://complianceconcourse.willkie.com/articles/new-jersey-federal-judge-dismisses-forex-case-with-prejudice-and-awards-attorney-fees/)
- [TradeInformer: Topstep launches introducing broker through Plus500 partnership](https://tradeinformer.com/broker-news/topstep-launches-introducing-broker-through-plus500-partnership)
- [Finance Magnates: Prop trading slips down Paris agenda as the US steps up (Jun 26, 2026)](https://www.financemagnates.com/forex/prop-trading-slips-down-paris-agenda-as-the-us-steps-up/)
- [Finance Magnates: Prop trading firms' renaissance: cutting US clients, integrating new trading platforms](https://financemagnates.com/forex/prop-trading-firms-renaissance-cutting-us-clients-integrating-new-trading-platforms)
- [Finance Magnates: cTrader restricts US prop firm access following internal regulatory assessment](https://www.financemagnates.com/forex/ctrader-restricts-us-prop-firm-access-following-internal-regulatory-assessment/)
- [Finance Magnates: ProjectX to end its third-party service offering (Nov 17, 2025)](https://www.financemagnates.com/forex/prop-firms-report-futures-prop-tech-provider-projectx-to-end-its-third-party-service-offering/)
- [17 CFR 4.41: Advertising by commodity pool operators, commodity trading advisors, and the principals thereof](https://www.law.cornell.edu/cfr/text/17/4.41)