The $300M Lie: How MyForexFunds Defeated the CFTC & The 2026 Comeback Roadmap
The world's largest prop trading firm was shut down in 2023 by regulators who accused it of $300M fraud. Two and a half years later, the case has been thrown out, the regulators have been sanctioned for lying, and MyForexFunds is planning its return. This is the full story.
$3.1M
CFTC sanctions
C$80K
OSC costs award
$290M+
Previously paid out
5 staff
CFTC on admin leave
01The Verdict Is In: MyForexFunds Wins on All Fronts
On August 29, 2023, the U.S. Commodity Futures Trading Commission (CFTC) did something unprecedented: it obtained an emergency court order to seize and freeze every asset belonging to MyForexFunds — the world's largest prop trading platform at the time. Overnight, 120,000+ active traders from 80+ countries were locked out. Accounts frozen. Payouts cancelled. A company processing 2,000 new customers per day was reduced to zero.
The CFTC's allegations were severe: $300+ million in fraud, operating as an unregistered foreign exchange dealer, manipulating trade execution with artificial delays and slippage, charging hidden $3-per-trade commissions, and running what Bloomberg characterized as a "Ponzi-like scheme."
Two and a half years later, the entire case has collapsed — not because of a technicality, but because the regulators themselves were caught lying to the court.
The Three-Part Victory
May 13, 2025: U.S. District Judge Edward S. Kiel dismisses the CFTC case with prejudice — meaning it can never be refiled. The CFTC is sanctioned $3.1 million in attorney fees.
December 2025: Ontario Superior Court orders the return of the vast majority of MFF's business assets and scales back the receivership.
February 25, 2026: Ontario court orders the OSC to pay C$80,000 in costs to MFF — more than 5x the previous record for costs awarded against Canada's securities regulator.
This isn't just a legal victory for one company. It's a seismic event for the entire prop trading industry — and a rare, stunning rebuke of government regulators on both sides of the border.
02CFTC Misconduct Exposed: False Statements, Hidden Evidence, and Sanctions
The dismissal wasn't based on a procedural error or a missed deadline. Special Master Jose L. Linares — a former Chief Judge of the U.S. District Court of New Jersey — conducted an exhaustive review and found a pattern of deliberate deception by the CFTC.
The most damning finding centered on a CAD $31.5 million transfer. The CFTC presented this to the court as evidence of "asset dissipation" — claiming MyForexFunds was moving money to hide it from regulators. This characterization was central to obtaining the emergency seizure order.
The truth? The $31.5 million was a legitimate corporate tax payment to the Canada Revenue Agency (CRA). And the CFTC knew it.
What the CFTC Did Wrong
False Statements in Sworn Declarations
CFTC staff made multiple false statements to the court in sworn filings. These were not mistakes — the Special Master found them to be deliberate.
Withheld Exculpatory Evidence
The CFTC received an email from the Ontario Securities Commission at least one week before filing, confirming the $31.5M transfer was a tax payment. They deliberately withheld this information from the court.
Deliberate Mischaracterization
The Special Master stated: "In multiple instances, with full knowledge of the error...the CFTC took deliberate steps down a path of obfuscation and avoidance."
Pattern of Bad Faith
The misconduct wasn't an isolated incident. It was a pattern of "willful" and "bad faith" conduct spanning approximately one year of litigation.
Acting CFTC Chair Caroline Pham called the conduct "inexcusable," citing "willful and bad faith conduct by making multiple false statements to the Court." Five CFTC staff members — four lawyers and one investigator — were placed on administrative leave. Lead attorney Ashley Burden acknowledged being "careless and sloppy."
The consequences were historic: the CFTC was ordered to pay $3.1 million in attorney fees as sanctions — a virtually unprecedented penalty against a federal regulator. And the case was dismissed with prejudice, meaning these specific allegations against MyForexFunds can never be brought again.
03Ontario Court Rebukes the OSC With Record Costs Award
While the U.S. case was the headline, the Canadian proceedings added another extraordinary chapter. The Ontario Securities Commission (OSC) had issued a cease trade order against MyForexFunds in September 2023, and in January 2024, the Ontario Superior Court appointed a receiver over MFF's Canadian assets.
On February 25, 2026, Justice Kimmel of the Ontario Superior Court of Justice (case file CV-23-00709536-00CL) delivered a ruling that Bloomberg described as historic: the OSC was ordered to pay C$80,000 (approximately US$58,500) in legal costs to MyForexFunds.
Record-Breaking Ruling
The C$80,000 costs award is more than 5x higher than the previous record for costs awarded against the Ontario Securities Commission. Justice Kimmel stated: "The court has not been overly impressed with the manner in which the Commission has been carrying out its public interest mandate in this case."
Bloomberg, The Globe and Mail, Bloomberg Law, and multiple financial publications covered the ruling. Bloomberg called it "the highest such amount imposed on the watchdog." The ruling followed a December 2025 court order that returned the vast majority of MFF's business assets and significantly scaled back the receivership.
The OSC's investigation technically continues — they allege MFF may have traded securities without registration and may have provided misleading information. But the court's pointed criticism of the Commission's conduct, combined with the record costs award, suggests the regulatory case is severely weakened.
04Asset Return Timeline: From Seizure to Recovery
Understanding the timeline of events is critical to grasping the full scope of what happened — and what's happening now.
August 28-29, 2023
CFTC files complaint; Judge Kugler grants emergency seizure
All MFF assets frozen. Business suspended. 120,000+ traders locked out. Personal assets of CEO Murtuza Kazmi frozen.
September 2023 — January 2024
OSC issues cease trade; Canadian receiver appointed
Ontario Securities Commission joins the action. Receiver placed over Canadian assets. Kazmi left without personal funds for 7 months.
2024 — Early 2025
Legal battle intensifies; Special Master appointed
Former Chief Judge Jose L. Linares reviews CFTC conduct. Discovers pattern of false statements and withheld evidence.
May 13, 2025
U.S. case dismissed with prejudice; CFTC sanctioned $3.1M
Judge Edward S. Kiel accepts Special Master's recommendation. CFTC cannot refile. Five staff placed on administrative leave.
October 2025
Ontario court scales back receivership
Court endorsement directs return of remaining business assets. Receivership significantly reduced in scope.
December 2025
Assets returned; funds unfrozen
Court unfreezes nearly all funds. MFF gains access to client data and systems. $10M remains in escrow; $500K retained by receiver.
February 25, 2026
OSC ordered to pay C$80,000 — record costs award
Justice Kimmel criticizes OSC's conduct. Bloomberg calls it the "highest such amount imposed on the watchdog."
05Outstanding 2023 Payouts: Will Traders Get Their Money?
When the CFTC seized MyForexFunds in August 2023, an unknown number of traders had pending, approved payout requests that were never processed. For two and a half years, these traders have waited — not knowing if they would ever see their money.
On February 2026, MyForexFunds made a public commitment via PR Newswire: they will honor all valid, verified payout requests from August 2023.
CEO Murtuza Kazmi's Statement:
"If you had a valid and verified payout request in August 2023, we are committed to ensuring those funds reach you."
Here's what we know about the payout process:
Our take: The commitment is encouraging, but traders should maintain realistic expectations. MFF is still navigating its systems review, and the exact payout timeline remains uncertain. The company had $10 million in escrow as of December 2025, and the receiver retained $500K for expenses. The financial capacity to honor payouts will depend on the full scope of recovered assets.
06The 2026 Comeback Roadmap
MyForexFunds has published a phased roadmap for their return. Unlike vague promises, this roadmap includes specific milestones tied to real operational needs.
COMPLETED — January 2026
Data Recovery
Full regain of missing data sources, systems access, and client information. This was the critical first step — without data, nothing else could proceed.
COMPLETED — February 2026
Team Reassembly
Reassembling the team for comprehensive data analysis. MFF previously had 300+ staff worldwide — rebuilding operational capacity is essential before any customer-facing work.
IN PROGRESS — March 2026
Support Channels Reopening
Opening support channels to restart direct communication with traders. This is the current phase — expect MFF to begin responding to trader inquiries this month.
UPCOMING — TBD
Full Relaunch
No confirmed date for accepting new traders. The company states it needs to complete its full financial, operational, and technical systems review first. Payment partner relationships need to be rebuilt.
MFF's website (myforexfunds.com) currently states it is "not currently operating" and is not accepting new programs. The roadmap is progressive but cautious — which is actually a good sign. A rush to relaunch without proper infrastructure would be a red flag.
07Murtuza Kazmi Speaks Out: "I Had to Beg and Borrow"
In an extensive interview with Finance Magnates, MyForexFunds founder and CEO Murtuza Kazmi revealed the personal toll of the regulatory action — and it paints a picture that's hard to reconcile with the CFTC's original narrative of a fraudster running a Ponzi scheme.
"When the CFTC did what it did, the effect was devastating. I went for seven months without a single penny to my name."
"I had to beg and borrow funds from family and friends. From getting gas for the car to buying groceries to paying for medication, all had to be done on borrowed funds."
"The hardest moments were the ones involving my children. Explaining to my seven-year-old son why we couldn't hold a birthday party because our resources were unjustly taken was a low point I wouldn't wish on anyone."
Kazmi, a Toronto-based trader and technology entrepreneur who previously worked at Deloitte, founded MyForexFunds in July 2020. Within 2.5 years, the company grew to become the world's largest prop trading platform — 500,000 users, $290M+ in payouts, 4.9/5 on Trustpilot with 14,000+ reviews.
The CFTC's seizure froze not just the company's assets but Kazmi's personal assets as well. He claims to have been unable to access any funds for seven months — a severe measure that the court ultimately found was based on false representations by the regulator.
Regardless of one's view of MyForexFunds' business model, the human cost of regulatory action based on false evidence raises serious questions about oversight accountability.
08What This Means for the Prop Trading Industry
The MFF case has far-reaching implications that extend well beyond one company. Here's what every prop firm owner and trader needs to understand:
Regulators Can Be Wrong — And Get Caught
The MFF case is one of the most dramatic examples of regulatory overreach in financial history. The CFTC's emergency seizure was based on false evidence. The message: regulatory action doesn't automatically mean guilt. Before writing off any firm targeted by regulators, wait for the legal process to play out.
The "Simulated Trading" Question is Settled
The CFTC's core argument — that MFF misrepresented simulated accounts as "live" — was never proven. The case being dismissed suggests the sim-funded model itself is not inherently fraudulent, though transparency in disclosure remains critical.
Compliance is Now Non-Negotiable
Even though MFF won, the 2.5-year legal battle cost millions and nearly destroyed the company. Prop firms that survive the coming regulatory wave will be those that proactively invest in compliance — KYC, transparent disclosures, proper licensing where required.
The Consolidation Wave is Accelerating
Between 80-100 firm closures, MetaTrader license revocations, and now FTMO acquiring OANDA Prop Trader — the industry is rapidly consolidating. Only well-capitalized, compliant firms will survive 2026-2027.
09The Regulation Landscape in 2026
The MFF case occurred against the backdrop of the most significant regulatory overhaul the prop trading industry has ever faced. Here's the current state:
Regulatory Developments by Jurisdiction
United States (CFTC)
The CFTC is expected to classify evaluation-based prop firms as Commodity Trading Advisors (CTAs), which would require formal registration, capital requirements, and standardized risk disclosures. Futures-focused firms face the most immediate regulatory pressure. The MFF sanctions have not slowed this trajectory — if anything, they've made the CFTC more careful in how it builds cases.
United Kingdom (FCA)
The FCA coordinated a crackdown across six countries in 2025, resulting in 3 arrests in the UK and the closure of 50+ websites. Expect formal licensing requirements for UK-based prop firms by late 2026.
Europe (ESMA / National Regulators)
European regulators are increasingly concerned that charging non-refundable evaluation fees without guaranteed funding resembles gambling or pay-to-play schemes. Standardized disclosure requirements are expected.
Australia (ASIC)
ASIC has signaled increased scrutiny of prop firms operating in Australia. Licensing requirements expected to tighten.
The key emerging compliance areas include: mandatory KYC/AML requirements (payment providers now demand this), marketing claim scrutiny ("Keep 90% of profits" type language), standardized drawdown disclosures, and formal payout window commitments.
The irony is stark: while the CFTC was pursuing MFF with false evidence, genuine scam firms like True Forex Funds ($1.2M unpaid), SurgeTrader (Ponzi allegations), and Fidelcrest (vanished) were operating freely. The MFF case arguably diverted resources from legitimate enforcement.
10Should You Wait for MFF to Relaunch?
The question every MFF loyalist is asking. Here's our honest assessment:
Reasons to Be Optimistic
- • Legal vindication on all fronts (U.S. and Canada)
- • Assets returned, receivership scaled back
- • Concrete roadmap with real milestones
- • Pre-shutdown track record: $290M+ paid, 4.9/5 Trustpilot
- • Public commitment to honor 2023 payouts
- • Bloomberg and major media covering positively
Reasons to Be Cautious
- • 2.5+ years offline — relationships, infrastructure, trust eroded
- • No confirmed relaunch date for new traders
- • OSC investigation still technically ongoing
- • $10M in escrow — may limit financial capacity
- • Payment partners need to be rebuilt
- • Competitor landscape has changed dramatically
- • MetaTrader licensing issues affect all forex prop firms
Our recommendation: Don't wait. The prop trading industry has excellent active options right now. Use them. If MFF relaunches with a solid offering, you can always add it to your rotation later. But don't pause your trading career waiting for a comeback that has no confirmed date.
11Lessons for Every Trader
Whether you were an MFF trader or not, this case contains critical lessons for anyone in the prop trading space:
1. Withdraw Profits Immediately — Always
The traders who lost the most in the MFF shutdown were those with accumulated, unwithdrawn profits. Money in your bank account is money you control. Request payouts as soon as you're eligible — every time, without exception.
2. Diversify Across Multiple Firms
Never concentrate all your trading capital with one prop firm, no matter how reputable. Spread across 2-3 firms. If MFF traders had split their accounts between MFF, FTMO, and Apex, the shutdown would have been painful but not catastrophic.
3. Regulatory Action Does Not Equal Guilt
The MFF case proves that regulators can — and do — get it wrong. While you should take regulatory warnings seriously, the legal process exists for a reason. Don't write off a firm solely because of an accusation. Watch for the outcome.
4. Document Everything
Screenshot your terms of service, payout confirmations, account balances, and any communications with prop firms. MFF traders with documented payout requests from August 2023 are now eligible for compensation. Those without documentation may struggle to prove their claims.
5. Use Independent Verification
Before joining any prop firm, check independent sources: Trustpilot (with a critical eye for fake reviews), our PropFiles database, trading forums, and payout verification platforms like PayoutJunction. Don't rely solely on the firm's own marketing.
12Final Verdict
The MyForexFunds saga is one of the most remarkable stories in the short history of the prop trading industry. A company that paid $290M+ to traders across 80+ countries was shut down overnight by regulators who — as the courts later found — lied to obtain their seizure order. The CEO was left unable to buy groceries or throw his child a birthday party. Two and a half years and millions in legal fees later, the company was fully vindicated.
The legal victories are unambiguous: case dismissed with prejudice in the U.S., $3.1M in sanctions against the CFTC, record costs against the OSC in Canada, five regulatory staff on administrative leave. This is as close to a complete vindication as you can get in the legal system.
But vindication and resurrection are different things. MFF faces enormous challenges in relaunching: rebuilding payment infrastructure, reestablishing trust, competing in a market that has evolved dramatically since 2023, and navigating a regulatory landscape that's only getting stricter.
What we believe: The MFF story is ultimately a cautionary tale about regulatory power, not about prop trading fraud. The company was imperfect — all prop firms are — but the evidence shows it was a legitimate business that paid traders and was destroyed by regulators who cut corners. Whether it can come back is an open question. That it deserves the chance is not.
We will continue to update this article as the MFF comeback progresses. For the original case study covering the 2023 shutdown and initial legal proceedings, see our complete MFF case study.
Frequently Asked Questions
Is MyForexFunds coming back in 2026?
Yes. MyForexFunds has published a concrete 2026 roadmap: January — data recovery, February — team reassembly, March 2026 — reopening support channels. Their Ontario court assets have been returned and the receivership scaled back. However, no date has been confirmed for accepting new traders. The company states it is conducting a full operational and financial review before relaunching.
Why was the CFTC case against MyForexFunds dismissed?
U.S. District Judge Edward S. Kiel dismissed the case with prejudice on May 13, 2025, after Special Master Jose L. Linares found the CFTC made multiple false statements in sworn declarations. The CFTC deliberately mischaracterized a CAD $31.5 million tax payment to Canada Revenue Agency as 'asset dissipation' despite having email proof it was legitimate. The CFTC was sanctioned $3.1 million in attorney fees for willful misconduct.
Will MyForexFunds pay outstanding 2023 payouts?
MyForexFunds has publicly committed to honoring all valid, verified payout requests from August 2023. CEO Murtuza Kazmi stated: 'If you had a valid and verified payout request in August 2023, we are committed to ensuring those funds reach you.' The company is currently conducting a data review to identify all outstanding payouts. No specific distribution date has been announced.
Was MyForexFunds a scam?
The legal evidence says no. The CFTC's fraud allegations were dismissed with prejudice — meaning they cannot be refiled. The court found the CFTC itself engaged in misconduct, not MyForexFunds. Before the shutdown, MFF had 4.9/5 on Trustpilot (14,000+ reviews), paid $290M+ to traders across 80+ countries, and processed 2,000+ new customers daily. The OSC investigation in Canada continues but has yielded no fraud findings.
How much did the CFTC have to pay in sanctions?
The CFTC was ordered to pay US$3.1 million in attorney fees as sanctions for willful misconduct. Additionally, the Ontario Securities Commission was ordered to pay C$80,000 (approximately US$58,500) in legal costs to MyForexFunds — more than 5x the previous record for costs awarded against the OSC. Four CFTC lawyers and one investigator were placed on administrative leave.
What alternatives to MyForexFunds should I use right now?
Since MFF is not yet accepting traders, we recommend proven alternatives: FTMO ($450M+ total payouts, 4.8/5 Trustpilot), Apex Trader Funding (85% OFF with code DEALPROPFIRM, no daily loss limits), FundedNext ($261M+ paid, up to 95% profit split), or The5ers (4.9/5 Trustpilot, since 2016). All are actively paying traders. Check our deals page for current promotions.
Sources & References
This investigation is based on court documents, official press releases, and verified reporting from:
- • Bloomberg — "MyForexFunds Case Leads Court to Rebuke Ontario Securities Commission" (Feb 26, 2026)
- • Bloomberg — "Simulated Trading Firm MyForexFunds Clears Legal Hurdle to Restart" (Dec 8, 2025)
- • Bloomberg Law — "Canada Court Rebukes Securities Watchdog Over Forex Trading Case"
- • PR Newswire — "MyForexFunds to Honour Outstanding 2023 Payouts" (Feb 2026)
- • PR Newswire — "Ontario Court Orders Unprecedented $80,000 Costs Award Against OSC" (Feb 25, 2026)
- • Finance Magnates — "My Forex Funds Parent Defeats CFTC in Court as Judge Imposes Sanctions"
- • Finance Magnates — "I Had to Beg and Borrow Funds" — Murtuza Kazmi Interview
- • Finance Magnates — "MFF Outlines 2025/2026 Roadmap as Prop Firm Signals Return"
- • Law360 — "CFTC Must Pay $3M in Attorney Fees as Sanctions in Forex Case"
- • The Globe and Mail, Yahoo Finance, Wealth Professional, LeapRate, Street Insider
- • U.S. District Court of New Jersey, Case No. 1:23-cv-11808
- • Ontario Superior Court of Justice, Case No. CV-23-00709536-00CL
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