Acquisition Initially Not "The Right Thing to Do," but Circumstances Have Changed
Karma prop trading firm announced its closure last week, with founder Eshan Balapatabendi claiming he had encountered "obstacles" that made his business "unsustainable."
However, an update a few days later indicated that the company was in the "final stages of negotiations" with a "leading prop firm" prepared to take over Karma's client base.
Karma had only entered the market two months prior, initially receiving positive reviews. Shortly before its collapse, it partnered with Match-Trade Technologies to offer traders Match-Trader integrated with TradingView.
Unexpectedly, the company lost liquidity, which Balapatabendi attributed to "cheaters" exploiting loopholes in the company's challenge system. In the same statement, he mentioned receiving numerous acquisition offers but didn't consider it "the right thing to do." Instead, he promised to refund all honest clients.
Just days after this statement, a dramatic turn of events occurred, with Karma's founder revealing that his company was in negotiations with another prop firm considering taking over the collapsed entity's accounts.
Balapatabendi stated on the company's official Discord: "KARMA is currently in advanced stages of negotiations for a possible acquisition by a leading prop firm in the industry that appreciates our transparency and sees the immense benefits of the community we've built."
He added: "If negotiations proceed as planned, all active KARMA accounts will be transferred to the acquiring company."
Increasing Number of Prop Firm Closures
Karma is not the only prop firm facing recent difficulties. According to reports, 20 different small prop trading companies closed last week due to Eightcap's decision to stop supporting MT4 and MT5, triggered by MetaQuotes' licensing issues.
Last week, foreign media Finance Magnates reported that Indigo Trader Funding, which applied for UK de-registration, and Funds For Traders, which lost its trading platform after Eightcap's exit, have disappeared from the market.
Astra Capital Group is attempting to capitalize on this situation, preparing to acquire any "closed prop firms", but expects to receive a large share of the profits generated by these entities' challenges.
According to a survey by another prop trading firm, PipFarm, this is a high-risk game where most investors lose money, but the amounts involved are substantial, with the average investor spending over $4,200 on challenges, and a group of several hundred respondents admitting to spending nearly $2 million in total on these challenges.
Reference：Fallen Prop Firm Karma in “Advanced Negotiations” with Potential Buyer
