Breaking: Sway Funded Takes Over Another Struggling Prop Firm

After acquiring MyFlashFunding in late July and Glow Node in early August, Sway Funded has now added another struggling prop firm to its portfolio. The news was unofficially shared on the Sway Funded Discord channel. According to details provided by moderators, the company has decided to take over its competitor, Karma Prop Traders.

Karma Prop Traders Acquired by Sway Funded

Clients of Sway Funded reportedly received emails on Wednesday evening, notifying them that the firm has acquired Karma Prop Traders, a competitor that had recently faced solvency and liquidity issues.

A Discord user, known as Bunny, shared in Sway Funded’s server: “Just got an email from Sway saying they’ve acquired Karma.” While the company has yet to issue an official announcement, comments from moderators on their Discord channel strongly hint at the acquisition.

One moderator, Cy, mentioned around midday that there was no official statement yet but assured users, “We’ll provide updates regarding Karma as soon as we have more information.”

Another moderator, Rodri, offered more insight, indicating that formal instructions and details would soon be shared via email. “Sway has stepped in to assist traders with pending accounts and payouts at Karma.” he stated.

Karma’s Rapid Rise and Fall in the Prop Trading World

Karma Prop Traders’ challenges surfaced just two weeks ago, when Founder Eshan Balapatabendi disclosed liquidity issues, forcing the firm to suspend operations.

“I started Karma to build something transparent and sustainable.” – Balapatabendi shared on the company’s Discord channel – “Unfortunately, there were a lot of roadblocks in the way which has caused us to be unsustainable.”

Balapatabendi attributed the company’s downfall to overspending on proprietary technology and a surge of “cheaters” exploiting loopholes in trading challenges, which he claimed led to the firm’s financial collapse.

Despite initially stating he wasn’t considering a sale, by the end of last week, reports surfaced that Karma was in “advanced negotiations” with a potential buyer.

“KARMA is currently in an advanced stage of negotiations with a leading Prop Firm in the industry regarding a possible acquisition. The Company appreciates our transparency and sees huge benefits to the community we have built.”– Balapatabendi said on the firm’s Discord channel.

It has since been revealed that the buyer is Sway Funded.

Boom and Bust in the Prop Trading Industry

New prop firms are springing up at a fast pace, but many are also shutting down just as quickly, with only the most resilient surviving. While consolidation is happening, data from Devexperts suggests no lack of interest in the industry. Over the past 12 months, the trading platform provider onboarded over 40 prop firms to DXtrade, its own trading tool.