What is kyc?
KYC is the identity verification required before a first payment. At prop firms it happens at the first withdrawal, not at the point the challenge is bought.
The acronym stands for Know Your Customer. At prop firms its timing inverts the usual logic, and creates the costliest risk on the whole route.
The inverted timing
You buy a challenge with no verification. You trade it, you pass it, you get a funded account — still with no verification.
It is only at your first withdrawal request that the firm asks for identity documents, proof of address less than three months old, and sometimes a verification selfie.
A trader living in an excluded country can therefore discover the problem after paying, trading and passing their evaluation. The terms and conditions rarely provide for a refund in that situation: the service having been delivered, the firm considers its obligation met.
Grounds for refusal
Four come up regularly.
The country of residence appears on the list of excluded jurisdictions.
An inconsistency between the information declared at sign-up and the documents provided — a different address, a misspelled name.
The minimum age not met, generally 18.
An account already existing under the same identity, where the firm limits accounts per person.
The habit to adopt
Before buying, check three things: that your country is not on the restrictions list, that you hold a recent proof of address in your name, and that the address you will declare is the one you can evidence.
Those three checks take a few minutes and avoid the industry’s most frustrating scenario: a route carried through to the end, and a payment blocked for an administrative reason that was knowable in advance.
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Related terms
- Challenge A challenge is the paid evaluation a prop firm sells. The trader must reach a profit target without crossing the imposed loss limits, on a simulated account. Passing it gives access to a funded account.
- Funded account A funded account is the trading account a prop firm allocates once the evaluation is passed. The trader operates under continuing risk rules and keeps a share of the profits, without ever holding the nominal capital.
- Payout A payout is the actual transfer of a funded trader's gains. It follows a cycle specific to each firm, after a minimum period since the account was opened, and often above a floor amount.
- Prop firm A prop firm is a company that gives access to a funded trading account after a paid evaluation. The trader deposits no capital: they pay evaluation fees, respect risk rules, and keep a share of the profits generated.