Hard Breach
A rule violation that results in immediate and permanent account closure, typically with forfeiture of all unpaid profits and the challenge fee.
Definition
A hard breach is any rule violation severe enough to trigger immediate account closure with no warning, no grace period, and no path to restoration. Hard breaches are distinguished from soft breaches (which may trigger warnings, profit voids, or reset offers): a hard breach always kills the account. Common hard-breach triggers include max drawdown breach, intentional trading during a news embargo on funded accounts, detection of copy-trading across accounts, identity misrepresentation, or attempted withdrawal fraud. Once a hard breach is registered, the firm typically also blacklists the trader's email and payment method from future purchases.
Example
Why It Matters
Hard breaches are the highest-consequence outcomes on prop accounts. The asymmetry is severe: a trader's worst expected outcome on a challenge is losing the fee; a hard breach on a funded account can void months of accumulated profit. Traders should treat rules with hard-breach consequences (news trading on funded accounts, cross-account trade correlation, identity rules) as absolute lines, even when the specific text seems interpretable. Firms do not negotiate hard breaches.