Rhodium FX CEO Talks Scams, Rug Pulls, and Broken Payouts in the Prop Firm Industry

The prop trading industry has a scam problem, and Rhodium FX co-founder and CEO Philip H. van den Berg isn’t pretending otherwise. Speaking on a Thentick podcast interview, later covered by Finance Magnates, one of the industry’s most established B2B trading publications, Philip laid out exactly where the sector is breaking down, and why so many traders are right to be cautious about who they fund a challenge with.

New Prop Firms Are Launching Faster Than the Industry Can Vet Them

Philip pointed to the sheer pace of new entrants as part of the problem. By his estimate, two to five new prop firms are launching every week, most of them thin operations that look identical, compete purely on price, and lack the operational depth to survive once a real wave of payouts comes due. That volume makes it harder for traders to tell a legitimate, well-capitalized firm apart from one built to collect challenge fees and quietly close.

Rug Pulls Are Accelerating

One of the more direct warnings in the interview was about firms that scale quickly on challenge fee revenue, hit a wave of funded traders who start winning, and then simply pull the plug rather than pay out. Philip described this pattern as increasingly common and said it’s exactly the kind of behavior drawing unwanted regulatory attention to the whole industry, not just the firms responsible for it.

Gold Trading Exposed How Fragile Some Payout Models Really Are

Philip connected the recent gold price surge directly to the industry’s scam patterns. As gold pushed to record highs, retail traders who had long struggled to pass evaluations suddenly found themselves consistently profitable, and a lot of prop firms simply couldn’t absorb it. Rather than honor those payouts, many firms responded by banning gold from their platforms altogether. Philip’s read: if a firm’s business model can only survive when most traders lose, that’s a structural warning sign worth taking seriously before you ever sign up.

Instant Funding Is a Favorite Scam Vehicle

Philip was especially direct about instant funding challenges, a product format that’s exploded across the industry in recent years. He described the format bluntly as a scheme built around exploiting trader impatience rather than identifying real trading skill, since the fee revenue is front-loaded and visible while the rules that make an actual payout nearly impossible only surface after a trader has already paid. It’s a pattern he says keeps attracting new operators precisely because the money comes in fast and the liabilities show up later, quietly, after the sign-up is already booked.

Why Rhodium FX Doesn’t Play This Game

Philip was clear that Rhodium has deliberately avoided the instant funding model he criticized, sticking instead with a two-step evaluation process built around long-term, consistent trading rather than fast payouts and high failure rates, a choice he admitted has meant slower growth than firms chasing quick sign-ups. He also confirmed Rhodium FX has never denied a payout to a trader who met the requirements, including comp account holders who broke minor rules and were still paid out and reset to Phase 2 instead of disqualified.

Philip’s read on the industry didn’t come from nowhere. Before co-founding Rhodium, he worked through account management and market analysis roles at BlackBull Markets, then rose to COO at Dominion Markets, giving him a firsthand view of both the brokerage side of the business and what happens when a fast-growing trading brand scales without the operational structure to back it up.

Regulation Is Coming, Just Not Fast Enough

Philip also weighed in on where this leaves the industry going forward. He believes regulators are watching and that the rug pulls and opaque financials some firms are running are creating real red flags, but that meaningful oversight is still some way off. In the meantime, he argued, the burden is on traders to look past marketing and challenge-fee discounts and actually check who they’re funding, starting with basics like a registered legal entity and a public payout track record.

Rhodium FX operates under the registered entity Rhodium FX – FZCO, based in Dubai Silicon Oasis, UAE, with published account tiers and rules available to review before you commit.

Read Finance Magnates’ full coverage of Philip’s Thentick interview here.