Deel, a payment service provider, recently cut off all payments with prop firms. A bull case for crypto.

History: On September 1st, the CFTC charged prop firm "My Forex Funds" (MFF) with Fraudulently Taking Over $300 Million From Customers Hoping to Become Professional Traders.

My 2 Cents MFF was taking money from traders buying prop firm challenges to payout successful traders. In addition, and worse, they were actively taking steps to increase Spread, Slippage, and more to make traders more likely to blow an account. All of this was on "simulated" or demo accounts. Per a chat MFF had with the third-party software provider regarding a successful trader, "Slip them to hell."

Deel MFF was using Deel to payout traders that were funded. Deel also was used by multiple prop firms, of which no other has been charged by the CFTC. As a result, Deel updated the terms of service and halted all payments to prop firms. From my understanding and checking the news, there was no formal legal request from the CFTC or US GOV to stop payments to prop firms, but rather they're trying to cover their a$$es.

Prop Firm Payouts Prop firms that have not been charged by the CFTC were cutoff and unable to pay successful traders.

Crypto Many prop firms have turned to crypto as a way to payout traders. I know a few have removed the $10k withdrawal limit to crypto and now offer BTC, ETH, and USDC payments.

Bull Case So WTF have I been doing in the bear market? Learning to trade and using prop firms. This is a clear example where without crypto, an entire industry may have been killed overnight. Are Prop Firms shady? Yes. Unquestionably. But are they doing anything illegal? Well, at least one has been charged. Is there regulatory uncertainty with prop firms? You bet.

Bull Case Part 2 Coinbase is launching perp trading to international customers. There is a chance in the future it could be for US customers. ETH is coming out with a major release in Q1 that will reduce the gas fees on L2s to amounts way lower than they are currently. My prediction is we are going to see an explosion of DEFI perp trading on chain when this happens.