In July 2025, Funded Unicorn, a German futures proprietary trading firm, filed for bankruptcy after suffering "high seven-figure losses" tied to its unique A‑Book trading model.

What Happened?

Unlike most prop firms that pay out profits from challenge fees and keep trader losses, Funded Unicorn tried something different: they mirrored funded traders’ positions 1:1 with real company capital on live markets. The aim was transparency and fairness—but the strategy backfired. During volatile weeks, unexpected price surges wiped out their financial reserves, forcing a sudden shutdown.

Why A‑Book Failed Here

No capital buffer: Running live mirrored positions demands significant reserves. When funded traders lose heavily at the same time, the firm’s capital can be quickly wiped out, leaving it unable to absorb the combined impact.

Unrealistic risk planning: Futures leverage is high. Without strong risk systems, large moves—even profitable ones—can overwhelm a firm.

Overconfidence in novelty: A‑Book seems fair in theory, but it exposes firms to unpredictable large losses, especially if many traders win at once .

Broader Implications

While A‑Book models have been praised as the future of prop trading, Funded Unicorn’s collapse proves they carry serious capital risk—especially without strong ongoing reserves.

The majority of prop firms still use B‑Book or hybrid models, offsetting trades internally to manage payout exposure.

Industry observers warn that transparency must be matched with risk capacity—true industry leaders hedge carefully or blend A and B-book strategies.

What Traders Should Take Away

Check firms' capital backing: A fair model means nothing if the firm can't pay when traders win.>

Beware marketing hype: Promises of 1:1 live trading may come with hidden systemic risk.

Prefer hybrids or broker-backed models: Platforms like Axi Select or OANDA’s prop arm offset risk with real-market liquidity while managing capital safety.

Final Word

Funded Unicorn’s sudden downfall is a harsh reminder: in prop trading, trust without capital is a recipe for disaster. If a firm advertises A‑Book execution, demand transparency—not just in marketing but in financial resilience.