US Prop Firms Are Registering With the CFTC in 2026 — a Year After Beating It in Court

In May 2025, the CFTC suffered one of the most damaging courtroom defeats in its history, and it came at the hands of a prop trading firm. Twelve months later, the strangest twist of 2026 is that US futures prop firms are walking toward the same regulator voluntarily. Topstep is now NFA-registered. Tradeify has launched a CFTC-regulated brokerage arm. Nobody is being forced. That reversal — from enforcement target to voluntary registrant — is the defining US regulatory story of the year.

The My Forex Funds case ended in sanctions, not vindication

The CFTC filed its fraud complaint against Traders Global Group Inc., the company behind My Forex Funds, and founder Murtuza Kazmi in August 2023. On May 13, 2025, Judge Edward S. Kiel of the US District Court for the District of New Jersey dismissed the case with prejudice and imposed Rule 11 sanctions on the CFTC itself, ordering the agency to pay over 3 million dollars in the defendants' attorneys' fees. Defense counsel described it as the largest monetary sanction imposed on a US government agency to date.

The court found that the CFTC had made false representations and acted willfully and in bad faith — including sitting for more than six months on an email from the Ontario Securities Commission confirming that a contested 31.5 million Canadian dollar transfer was a legitimate tax payment, not misappropriation.

One caution matters here, and it matters a lot. The dismissal was granted on litigation-conduct grounds. The court punished the CFTC for how it ran the case. It did not rule that the funded-account model is lawful, and it did not settle how prop firms should be classified under US law. Any firm reading the outcome as legal clearance for the evaluation model is reading more into it than the record supports.

2026: the voluntary walk inside the perimeter

That unresolved classification question is exactly why the next development is so striking. According to Finance Magnates (21 May 2026), US futures prop firms are now moving inside the CFTC perimeter on their own initiative:

For context, the same Finance Magnates report notes that 885 registered introducing brokers currently operate in the US, and that DJ Hennes was appointed Director of the CFTC's Market Participants Division — the division that would deal most directly with firms crossing into registered territory.

Why registration is becoming a moat

Registration is expensive, slow, and binding. That is precisely the point. A firm that registers accepts examinations, reporting obligations, and a regulator that can end its business — and in exchange it gets something no marketing budget can buy: a verifiable, public difference between itself and the hundreds of unregistered challenge sellers it competes with. Finance Magnates framed the trend as a question — an opportunity or a survival strategy — and the honest answer is both. After two years of closures and exit scandals across the industry, a registration number is one of the few trust signals a trader can independently check rather than take on faith.

There is a second effect. Every firm that registers raises the bar for the ones that have not. If registered evaluation-to-brokerage pipelines become the norm in US futures prop, the unregistered majority inherits an uncomfortable question from every prospective customer: why not you?

The futures connection

None of this is happening in CFD land, and that is not a coincidence. The registration path exists in futures because the products trade on centralized, CME-cleared markets with a legal US access route — an analysis point made in the Finance Magnates CFTC-perimeter piece. The migration is already visible: The5ers launched a worldwide futures prop offering in beta on the Black Arrow platform (Finance Magnates, 19 February 2026), FundedNext has entered futures, and the incumbent US futures firms — Topstep, Apex, MyFundedFutures — are the same names now leading on registration. The asset class and the regulatory strategy are converging into a single playbook.

What traders can actually check

Registration status is a fact, not a claim — which makes it exactly the kind of signal worth weighting. It is the same logic behind PropDNA's Trust Score methodology, which scores firms on verifiable components such as payout reliability, rule stability, and verified trader reviews rather than marketing volume. Individual firm pages on thepropdna.com track those components firm by firm, and the ones that have passed independent checks carry a PropDNA Verified marker — another fact a trader can see at a glance rather than take on trust.

The 2026 lesson is simple to state. The CFTC lost its biggest prop case on conduct, the legal status of the model stayed unresolved, and the leading US futures firms decided the safest ground was inside the perimeter anyway. Where firms voluntarily accept oversight, traders get something rare in this industry: a checkable fact.

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Trading carries substantial risk of loss. Prop evaluation fees are typically non-refundable and the majority of traders do not pass first attempts. This article is for information only and does not constitute financial advice. PropDNA is an independent comparison and information service.