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EightCap
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EightCap is a privately held Australian financial technology company that provides online trading across over 1,000 financial instruments. It was founded in 2015 by Joel Murphy, a former executive at Pepperstone who was revealed as a insider trading scammer.
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History
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EightCap states on its website that it was founded in Melbourne in 2009.[1] However, many media outlets cite 2015 as the company's actual founding year.[2][3] Joel Murphy, widely cited as EightCap's founder, worked at competitor broker Pepperstone until 2014, when he was dismissed after reporting an insider trading case to regulators.[4][3]
In 2016, EightCap partnered with the payment service provider Paysafe, expanding the range of available client payment methods.[5]
EightCap partnered with Scuderia Ferrari for the 2019 and 2020 Formula One seasons.[6]
In 2021, the company added over 250 cryptocurrency CFDs to its offering.[7]
That same year, EightCap attracted attention for hiring Chris Hill as a risk analyst. Hill had previously been convicted in one of Australia's largest insider trading cases. Although Hill made only $20,000 from the trades, his associate Lucas Kamai reportedly gained $7.8 million in 2014. Murphy himself, who reported the insider trading case to the regulator while at Pepperstone, was subsequently dismissed from the firm. In later interviews, Murphy expressed sympathy for Hill and said he wanted to help him rebuild his life.[4][3]
In 2023, Alex Howard replaced Murphy as CEO. Murphy stayed on as Non-Executive Chairman.[8]
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Business and regulation
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EightCap provides online trading in a wide range of financial instruments, including forex, stocks, indices, commodities, and cryptocurrencies. Clients can trade via the MetaTrader 4 (MT4) and MetaTrader 5 (MT5) platforms,[7] as well as through Embedded, the company's proprietary platform for Trading-as-a-Service (TaaS).[2]
The company holds regulatory licenses in several jurisdictions through its various subsidiaries: the Australian Securities and Investment Commission (ASIC), the Financial Conduct Authority (FCA),[9] the Cyprus Securities and Exchange Commission (CySEC), FSA Seychelles,[10] and the Securities Commission of the Bahamas (SCB).[11]
In 2022, FinTelegram reported that EightCap's CySEC-regulated EU entity and its Bahamas-licensed affiliate were closely linked, alleging that the company redirected European clients to its offshore platform via eightcap.com to offer trading conditions exceeding what is allowed under EU regulations for retail clients. The report also noted that Eightcap EU Ltd had previously operated under the name RCapital Solutions Ltd, associated with the now-defunct broker MXTrade. EightCap did not publicly comment on the allegations. While operating offshore subsidiaries is common among CFD brokers, the practice has been criticized as a form of regulatory arbitrage.[12]
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Controversy
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Regulatory warning in Malaysia
EightCap is included on the Investor Alert List published by the Securities Commission Malaysia. The regulator warns that the company "carries on unlicensed capital market activities of dealing in securities".[13]
Termination of services for prop-trading firms
In February 2024, EightCap announced the suspension of brokerage services for all proprietary trading firms, effective 28 February 2024.[10] While the company described the decision as part of a routine business adjustment, it prompted criticism from industry participants. The sudden move led to the closure of several firms, including the retail-focused Funded For Traders.[14][15] Other affected firms included Funding Pips, Funded Engineer, True Forex Funds, and MPFunds, all of which were forced to cease operations as a result of EightCap's actions.[16][17]
Breaches of leverage restrictions
In October 2020, the Australian Securities and Investments Commission (ASIC) introduced leverage limits and other measures to improve protections for retail investors trading in contracts for difference (CFDs).[18] Despite these regulations, EightCap was found to have breached the limits on multiple occasions by offering excessive leverage and misclassifying retail clients as wholesale. In 2023, amid growing regulatory pressure, the company self-reported the breaches to ASIC and agreed to provide compensation to affected clients.[19]
References
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