"Youhave a lot of prop firms... not even allowing gold to be traded anymore,” thatis how Philip H. van den Berg, co-founder and CEO of Rhodium FX, described what he says is agrowing structural problem quietly spreading across the retail prop tradingindustry. Speaking ina Thentick podcast interview, he argued that the gold market's record-breakingrun is doing something the industry never prepared for: making ordinary retailtraders consistently profitable, and the economics of many prop firms simplycannot absorb it.Theobservation cuts to a core tension that has been building for months. As gold pricespushed to successive all-time highs, retail traders who had long struggled to passevaluation challenges suddenly found themselves on the right side of a single,powerful trend. For prop firms whose business model depends on a majority oftraders failing or churning out before reaching payout thresholds, that is asignificant problem.Philip, whospent several years as COO of Dominion Markets before founding Rhodium, saidthe response from many firms has been blunt: simply removing gold from the listof tradeable instruments. The same volatility that prompted some prop firms to delist the metal also forced liquidity providers to act, with Scope Prime widening spreads following CME margin rule changes."We'reseeing owners make money real quick and they pull a rug on the whole on thewhole system," he said.You canwatch the full interview on YouTube. The article continues below the video:2-5 New Prop Firms OpeningEvery WeekThe goldissue does not exist in isolation. Philip pointed to a market that has grownfaster than its underlying infrastructure can support, with new entrantsflooding in at a pace that raises serious questions about long-term viability."There's about two to five prop firms opening up almost every week,"he said. That pace of entry, he argued, has produced a landscape where mostfirms look identical, compete on price, and lack the operational depth tosurvive a sustained payout cycle.The prop firmsector has faced growing scrutiny over its business model sustainability, particularly following astring of high-profile closures and enforcement actions in 2024. Philip'scomments suggest the stress has not abated. He described a pattern where firmsscale quickly on challenge fee revenue, encounter a wave of funded traders, andthen find themselves unable to honor the commitments that follow.The volumesurge has been documented across the industry. easyMarketsreported a 240% jump in gold trading during Q4 as volatility returned to themarket, a figurethat helps illustrate the scale of the trend Philip says most firms were notpositioned to absorb.Rhodium, hesaid, is trying to take a different route by designing its rules aroundlong-term trader behavior rather than optimizing for failure rates. "Ourrules... push traders to be a bit more consistent and long-term," he said,describing the goal as a "more long-term consistent successfulpartnership" compared to what he characterized as industry norms.Instant Funding ModelsUnder FirePhilip wasparticularly direct about instant funding challenges, a product format that hasgained popularity across the sector in recent years. He described them as amechanism built around exploiting trader impatience rather than identifyinggenuine trading talent."Theseinstant funding challenges... it's just a quick money-making scheme," hesaid. "It literally works on people's greed... people want to get instantfunded. All they think about is I'm going to have the money right away, butthey don't realize that these rules are so strict and so hard to actually getthat first payout."Instantfunding models became a major topic of debate within the industry after several firms thatheavily promoted the format ran into payout difficulties. Philip argued thatthe format continues to attract new operators precisely because the revenue isfront-loaded and visible, while the liabilities arrive later and quietly.Rhodiumdoes not offer instant funding. Philip said the firm has seen slower growth asa result, but maintains that a two-step evaluation model with more lenient,consistent rules will produce a more stable client base over time.Pay-to-Play Reviews andthe Trust ProblemOne of themore pointed moments in the interview came when Philip addressed how tradersresearch and select prop firms. He said the review ecosystem that most tradersrely on is fundamentally compromised, claiming that rankings and ratings onmajor comparison platforms largely reflect which firms have the biggestmarketing budgets rather than which firms actually pay out reliably. Accordingto Philip, it comes down to "who's got the biggest pocket."Thiscreates a compounding problem for newer or smaller firms trying to compete onquality rather than spending. Philip described the challenge of convertingexperienced traders who have long relationships with established names, notingthat even if a newer firm offers better conditions, the trust gap is difficultto bridge.The questionof trader protection and review transparency has become a recurring concern across industry discussions,particularly as a number of firms that carried strong review scores were laterfound to have manipulated their ratings or withheld payouts.Regulation Is Coming, butNot QuicklyPhilipspoke at some length about the regulatory horizon for the prop trading sector,offering a more measured view than the alarm that has characterized someindustry commentary. He said regulators are watching, but suggested they remaingenuinely uncertain about how the business model works."I dothink we have a bit more time, but a lot of these owners are making a lot ofred flags for these regulators," he said, pointing to rug pulls and opaquefinancial operations as the behaviors most likely to accelerate a regulatoryresponse.He drew acomparison to how ESMA's leverage cap on European retail brokers played out,noting that the rule, while defensible on trader protection grounds, pushedmany clients toward offshore providers offering higher leverage. The lesson hedrew was that regulation without a coordinated industry response oftenreshuffles clients rather than protecting them. The ESMAleverage rules have had lasting effects on the European retail FX market, redirecting significant volumes toless-regulated jurisdictions.On theUnited States specifically, Philip said Rhodium has made a deliberate decisionto stay out of the market entirely. "If America hunts you down as afinancial institute, they really hunt you down," he said, referencing thecompliance risk posed by the Dodd-Frank Act. He warned that firms quietlyaccepting US clients while building out their operations are creating a legalliability that will surface the moment they try to legitimize or scale.Background: From BlackBullto Dominion to RhodiumPhilip'spath to running a prop firm ran through the brokerage side of the industry. Hejoined BlackBull Markets in 2018, worked through account management and marketanalysis roles, and was later recruited by the owner of Dominion Markets tobuild out the sales structure. He eventually rose to COO, handling operationswhile the firm's founder, known publicly as Raja, remained the outward face ofthe business.DominionMarkets built a substantial following in the retail trading community, in partthrough its educational content and the high-profile social media presence ofits founder. Philip described the firm's pace as intense, reflecting thefounder's background as a short-timeframe trader. He said the experience gavehim both the operational knowledge to run a financial company and a clearerview of what traders actually need versus what most firms offer.Rhodium FX,which is based in Dubai, is positioning itself as a longer-term, moreinstitutionally structured alternative to the mainstream retail prop model.Philip said the firm is also exploring connections to liquidity infrastructurethat would allow it to benefit directly from successful trader activity, ratherthan operating on a pure challenge-fee model.This article was written by Damian Chmiel at www.financemagnates.com.