What is KYC at a prop firm, and when do you have to verify your identity?

KYC, short for know your customer, is the identity check a prop firm runs before it opens a funded account and starts paying a trader real money. At Phoenix Trader Funding it happens once, straight after a passed evaluation clears its review: you verify your identity and sign the funded contract in the same step, and together they usually take a few minutes. Buying and trading an evaluation asks for neither.

The rest of this page covers why the check exists, where it sits on the path to a funded account, how it runs, and what it does not ask of you.

Why a prop firm checks who you are

Know your customer is the process a firm uses to establish that a customer is the real, named person they say they are. Banks and brokers run it before they move money for anyone, and a prop firm runs it for the same reason: at some point it is going to send money to you.

An evaluation never reaches that point. It is a simulated account with a profit target and a loss floor, and passing it pays nothing by itself. The funded account that follows is where payouts begin, so the funded account is where the check belongs. Verifying every evaluation buyer would mean checking a great many people the firm will never pay; verifying nobody would mean sending real money to names it cannot stand behind.

Where a trader lives matters too. Phoenix Trader Funding cannot accept traders from the countries on its exclusion list, which is built on US OFAC sanctions, and a list like that can only be applied to people whose identity has been established.

Where verification sits on the path to funding

The order is the same on every line that has a simulated funded stage, which means Classic, Daily and Spark:

1. Trade the evaluation until it reaches its profit target inside every rule.
2. The pass goes to a review. That review is often instant: 70 to 80 percent clear immediately, and the rest within a few hours.
3. Once the review clears, you complete the identity check and sign the funded contract.
4. The funded account opens, and your first payout is built from there.

The window for step three belongs to you. You have 48 hours from the review clearing to finish the identity check and the contract, and in practice both take a few minutes, a few hours at most. The window is a deadline, not an estimate of how long the step lasts, so the sensible move is to do it as soon as it arrives.

A Spark carries one extra item in that same window: its activation step falls due there, and if it is not settled the evaluation is void. Classic and Daily have no activation step.

Merit is built differently. It has no simulated funded stage at all: a Merit trader who is accepted after the 30 calendar day assessment goes straight to a live funded account at the broker, so verification is the step between that decision and the live account. There is a fuller walk through every stage in our answer on how to get funded as a trader.

How the check runs

Identity checks run through Phoenix Identity, the firm's own verification product. The check itself is instant, so the time the step takes is mostly the time it takes you to complete it.

The second half of the step is the contract. A funded agreement is the contract a trader signs before a funded account opens, and it is the document that governs that account: its rules, its payouts and what follows if the account is ever closed. It is worth reading rather than scrolling straight to the signature, because when a funded account is closed, whether money already earned is paid and what happens to the account fee depend on the reason for the closure, and the specific terms are the ones in the agreement you signed. The trader is always told the reason for a closure.

On Phoenix Labs accounts the funded agreement does one more job: it makes the strategy rules published in the Labs Help Center binding, so those rules carry the same weight as anything written into the contract itself.

What verification does not ask of you

Traders are often wary of this step because of what other industries attach to it, so it helps to be exact about its limits.

• No licence or accreditation. You need no regulatory accreditation of any kind to trade a funded account.
• No personal capital. Phoenix Trader Funding never asks a trader to invest personal capital. Verifying your identity is not a step toward depositing money into a trading account, and a request framed that way is not part of the process.
• No track record. There is no application to write and no trading history to submit. The evaluation you passed is the record.

What it does need is simple: that you are who you say you are, and that you live somewhere the firm can accept. The list of countries that cannot be accepted is kept in the Phoenix support FAQ.

After the check: getting paid

Once the funded account is open, verification has done its job and the payout rules take over. Each family builds its payouts differently: a Classic pays weekly, a Spark bi-weekly, a Daily account at the end of every day you trade once its first green day has matured across the three trading days after it, and Merit pays on the live account only. Those rules are set out in our answer on how payouts work on a funded account.

The money itself leaves through Payoneer, PayPal or Wise, and through nothing else. Crypto is a way of paying for an evaluation, money coming in, and never a way of being paid. A payout that is refused comes with an emailed reason rather than silence.

The last stage works on the same footing. A live funded account trades with real money at an outside broker, EdgeClear on Rithmic. Classic and Spark reach it after four payouts plus a risk review, Daily reaches it on the lifetime amount already paid out, and Merit reaches it directly. Every rule except holding a position overnight or over the weekend is waived there.

Common follow-up questions

Do you need to complete KYC before buying a prop firm evaluation?

No. The identity check comes after a passed evaluation clears its review, in the same step as signing the funded contract. Buying an evaluation and trading it ask for neither, because an evaluation does not pay out by itself.

How long does the KYC step take once the review clears?

A few minutes, a few hours at most. The trader has 48 hours from the review clearing to complete both the identity check and the funded contract, but that window is a deadline rather than a measure of how long the step lasts.

Who carries out the identity check?

It runs through Phoenix Identity, the firm's own verification product, and the check itself is instant. The time the step takes is mostly the time it takes the trader to complete it and sign the funded contract alongside it.

Do I need a licence or accreditation to trade a funded account?

No. A trader needs no regulatory accreditation of any kind to trade a funded account, and no personal capital either. The identity check exists so the firm knows who it is paying, not to qualify you as a professional.

Which payout methods can a verified trader use?

Payoneer, PayPal and Wise, and nothing else. Crypto can be used to pay for an evaluation, which is money coming in, but it is never a method for receiving a payout from a funded account.

Does a Merit account go through the same check?

Yes, at a different point. Merit has no simulated funded stage, so a trader accepted after the 30 calendar day assessment goes straight to a live funded account at the broker, and identity verification is the step that comes before it.