Futures prop firm bans became a growing concern in July 2026 after Tradeify traders lost access to their accounts for activity the firm said violated its rules. Around the same time, Lucid Trading announced additional fraud-prevention measures. Some traders accused the firms of using these policies to avoid paying profitable accounts. However, both firms said the enforcement targeted organised trading rings, coordinated hedging and other forms of fraudulent activity.
The recent enforcement action should not concern traders who follow the firms’ rules. This article explains what led to the bans at Tradeify and Lucid Trading, how organised trading rings operate and what you can do to prevent legitimate activity from being mistaken for coordinated abuse.
What Traders Have Been Seeing at Tradeify and Lucid Trading
The recent discussion surrounding futures prop firm bans was driven largely by enforcement actions from Tradeify and Lucid Trading. Both firms introduced measures intended to detect fraudulent activity and remove accounts linked to coordinated rule violations. Below is a closer look at the actions each firm took.
Tradeify Traders Losing Platform Access
In mid-July 2026, Tradeify users began sharing a login message stating that they could no longer access their accounts because of suspicious activity. Some affected traders claimed there was no valid reason for their bans. A Tradeify moderator addressed the concerns in the firm’s Discord community on July 18, stating that most of the banned users had been linked to scams or organised trading rings.
One practice targeted by Tradeify was coordinated hedging across multiple accounts. For example, one account may hold a long position while another holds a short position in the same market. Because the positions move in opposite directions, the group can use a profitable account to offset losses elsewhere and increase its chances of securing a payout.
Lucid Trading Introducing Additional Fraud Checks
On July 22, Lucid Trading emailed its users about a recent increase in coordinated bad actors, payment fraud, false identities, and group hedging. In response, the firm introduced additional know-your-customer checks during registration for sign-ups that meet its higher-risk criteria.
The new KYC requirement does not apply to every new trader. It targets registrations flagged as presenting a higher risk of fraud. By identifying suspicious users before they gain access, Lucid Trading aims to reduce coordinated abuse and protect the platform’s integrity for both existing and future traders.
What Gets a Legitimate Trader Flagged
As Lucid Trading, Tradeify, and other futures prop firms strengthen their enforcement against organised trading rings, legitimate traders may occasionally be flagged for review. The following activities and account connections can attract additional scrutiny, even when no deliberate rule violation has occurred.
Shared Wi-Fi and IP Addresses
Prop firms treat several accounts using the same IP address as a potential sign of coordinated activity. As a result, roommates or family members who trade with the same firm over shared Wi-Fi could be flagged for review, even if they operate independently.
Use a private and trusted internet connection when accessing your trading account. If another person in your household uses the same prop firm, keep your identities, payment methods, and login details separate. You can also contact the firm in advance to explain the situation and ask whether it requires additional verification.
If two or more legitimate traders in the same household use the same futures prop firm and internet connection, their shared IP address may lead to an additional review. This does not automatically mean that either account will be closed. The firm can simply request KYC documents or an explanation to confirm that each person controls their own account.
Each trader should use their own payment method, phone number, email address, and login details. Keeping this information separate creates a clear record of independent account ownership and avoids the appearance that one person is operating multiple accounts under different names.
Opposing Positions Across Accounts
Holding opposing positions across multiple accounts is likely to attract a firm’s attention. Firms can still identify the trades as a hedge, even if you enter them at different times or use different position sizes. Firms may also review opposing trades in closely related contracts, such as a long ES position in one account and a short MES position in another.
Before entering a trade, check the open positions and pending orders across every account you control. Pay particular attention to the same instrument and closely related markets. This reduces the risk of unintentionally creating an opposing position that violates the firm’s hedging rules.
How Hedging Groups Exploit Prop Firms
Organised hedging groups use multiple accounts to open opposing positions in the same market. If the price rises, the long account gains. If it falls, the short account benefits. The setup does not guarantee an overall profit, but it gives the group a profitable account regardless of the market’s direction.
Participants may try to conceal the connection by staggering their entry times, varying their position sizes, or using related contracts instead of the same symbol. For example, one account might go long ES while another goes short MES. Although the contracts have different symbols and values, both track the S&P 500 and create offsetting market exposure.
Call Center Operation
Organised trading rings can use a call-centre-style structure to coordinate activity across multiple accounts. A central organiser assigns trading directions while members place opposing positions, giving the group a profitable side regardless of the market’s movement. Spreading the orders across different traders and accounts also makes the full pattern harder for one firm to detect.
In 2025, PipFarm CEO James Glyde said his firm uncovered an international trading cartel with around 800 members. According to Finance Magnates, the members coordinated buy and sell positions across different prop firms. Each company initially saw only one part of the hedge, making the connection between the accounts less obvious.
Prop Firms Finding Organized Trading Activities
Firms do not limit their reviews to identical orders placed at the same time. Lucid Trading and Tradeify use monitoring systems that can flag accounts taking opposing exposure across the same or related markets, even when the positions differ in size or timing.
Risk teams can examine a wider trading history, including repeated offsetting positions, overlapping trade times, related instruments, and connections between accounts. Recurring patterns across several accounts can help a firm identify linked traders and uncover an organised hedging ring.
The Expose Pages and One Post That Did Not Add Up
According to Lucid Trading CEO AJ, some expose accounts act as public mouthpieces for organised trading rings. When a firm closes linked accounts or denies a payout for coordinated hedging, these pages may respond with scam allegations. Supporting profiles can then share and engage with the post, increasing its reach and pressuring the firm to reverse its decision.
Established firms such as Lucid Trading and Tradeify may be better positioned to withstand the reputational damage and defend their enforcement decisions. Smaller or newer firms may be more vulnerable to a coordinated backlash and could decide that approving the payout is less costly than continuing the public dispute. However, a payout complaint on social media does not prove that the trader participated in a hedging ring. Each case still requires evidence connecting the trader, the accounts, and the alleged coordinated activity.
Who Tradeify’s Hedging Warning Actually Applies To
Tradeify’s July 25 warning applies to traders who hold opposing positions across multiple accounts or coordinate such trades with another person. This includes using an account owned by a friend or relative to create offsetting exposure. However, merely having a friend or relative who independently trades with Tradeify is not a violation.
Tradeify’s hedging rule applies to Evaluation, Sim Funded and Elite Live accounts. It covers opposing positions in the same instrument and products within the same Product Group. For example, holding a long ES position in one account and a short MES position in another can trigger detection and review because both belong to the Equity Index group.
Who Lucid Trading’s KYC Check Actually Applies To
Lucid Trading’s additional KYC measure, announced on July 22, applies only to new registrations that meet its higher-risk fraud criteria. The firm may also request identity documents during a later account review or when processing a payout. Being selected for KYC does not mean a trader is automatically suspected or found guilty of fraud, and the checks do not apply to every customer.
Lucid Trading has not publicly disclosed every factor used to identify higher-risk registrations. If the firm requests identity documents, provide accurate and current information that matches the details on your account and payment method. KYC helps Lucid confirm the trader’s identity and account ownership. The firm must examine trading records and connections between accounts separately to determine whether coordinated hedging occurred.
Should You Be Worried?
Based on the firms’ statements, legitimate traders earning profits are not the intended targets of the recent futures prop firm bans. Tradeify is strengthening its enforcement against coordinated hedging across accounts, while Lucid Trading is focusing on group hedging, payment fraud, and false identities. Neither firm has identified profitability alone as a reason for closing an account.
Trading through a shared network may cause your account to be flagged for review. Particularly if another person using the same connection also trades with the firm. A flag does not automatically mean that your account will be closed or that you have broken a rule. The firm may request KYC documents and review your account activity to confirm your identity and account ownership.
If multiple traders live in your household, each person should use their own information. These include payment method, phone number, email address and identity documents. Keeping these details separate helps demonstrate that each trader controls their own account.
Prop firm policies can change, so review the rules before buying or trading an account. Use PipBack’s futures prop firm comparison tool to compare firms based on their rules, platform support and operating history. You can also check PipBack’s rule-change tracking page for updates that could affect your strategy or existing accounts.
FAQ
Can ES and MES Positions Be Considered Hedging?
Holding a long ES position and a short MES position creates offsetting exposure. Both contracts track the S&P 500 Index. Their different contract sizes do not make them unrelated markets. When these opposing positions are held across separate accounts, a prop firm may classify the activity as prohibited correlated hedging.
Does Lucid Trading Require KYC From Every New Trader?
Lucid Trading requires additional KYC checks only from new registrations that meet its higher-risk fraud criteria. Being selected for verification does not mean the applicant has committed or is suspected of fraud. The check allows Lucid Trading to confirm the person’s identity before completing the registration.
What Is a Futures Prop Firm Trading Ring?
Trading rings are organised groups that coordinate positions across multiple accounts and, in some cases, several prop firms. By splitting the opposing trades between firms, the group attempts to hide the full hedging strategy. They also pursue payouts from the winning accounts.