Around the Block With Jefferson Nunn – Interview With Patrick Murphy of Eightcap
In the newest edition of “Around the Block With Jefferson Nunn,” Jefferson interviews Patrick Murphy. Patrick Murphy started his career in banking in Australia. He’s now Eightcap’s Director of UK for the Group and is working on a new embedded investing solution, which he officially launched earlier this year.
Hey guys, buckle up for a new edition of Around the Block podcast, the one and only podcast meant to educate young entrepreneurs like you how to make your way in the cryptocurrency world. Today we’re talking with a guest, Patrick Murphy. Patrick Murphy started his career in banking in Australia. Then he moved to London, where he worked in risk management for an investment broker and a Japanese bank. He then worked with Paysafecard, Neteller, Skrill, and Paysafe’s Crypto Products on consumer compliance. He’s now Eightcap’s Director of UK for the Group and is working on a new embedded investing solution, which he officially launched earlier this year.
To listen to the podcast, click on the link below.
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Jefferson Nunn 0:50
Welcome to another edition of Around the Block with Jefferson Nunn. And I’m here today with Patrick at Eightcap. Welcome to the show.
Patrick Murphy 1:00
Hey, how are you doing?
Jefferson Nunn 1:02
Awesome. Awesome. So why don’t you tell me a little bit more about who you are and what you got going on?
Patrick Murphy 1:10
Cool. So yeah, I’m Patrick Murphy. I’m currently sitting in London, in our UK office for Eightcap. I’m the director here of the UK entity where derivatives broker. So we offer derivatives to retail customers in crypto stocks, commodities, FX, and indices. And yeah, we’re kind of moving more and more into crypto space.
Jefferson Nunn 1:44
Yeah, I see that I’m looking at your website. And it looks like you have compatibility with MetaTrader Four and MetaTrader Five. Are a lot of crypto traders now gravitating towards the respective tools.
Patrick Murphy 2:01
Yeah, I’d probably say, out of our trading platforms that we offer. TradingView is probably probably the one that they’re using the most. I know, I’ve seen a lot of other crypto exchanges that have integrated with trading view. So MetaTrader is probably more of the traditional traders, probably an older age group. So some of them have moved across, as we’ve kind of extended our product offering into Cryptos for them, but probably more on the trading view platform for crypto derivatives.
Jefferson Nunn 2:40
I see I see. Yeah, well, I come from the MetaTrader days. So probably. That’s a little bit about my background and way back in the 90s and 2000s, and so forth. So but yeah, trading view also looks like a great platform. And it looks like you know, if you can time it right? You can make a lot of money on on crypto. So where are you seeing a lot of time derivative trades? Or is it more just based on market conditions? Or what?
Patrick Murphy 3:20
Um, yeah, so in terms of in terms of the crypto we’re seeing customers move across to this. So it’s kind of short term, short term strategies that they’re using a lot of the traders trading Bitcoin and Ethereum is probably, you know, 95% of our, our traders are using those digital assets to kind of work out their strategies for those pairs. But yeah, we’ve also got quite a large offering. So we’ve got nearly 400 digital assets that that we’re offering is derivative. So we’re seeing a little bit of action in an event, some of the lesser known coins, but most of it is the kind of top five, top five digital assets.
Jefferson Nunn 4:10
Gotcha. Gotcha. And if I may ask, if I may ask what makes the difference between a EightCap and, you know, just there’s a lot of other platforms out there. And it seems like every other day somebody else is getting into the space. So what makes a EightCap unique?
Patrick Murphy 4:29
I’d say probably, probably we’ve we’ve got a couple of key points to start with, where we’re licensed and regulated as an investment firm. So we offer crypto as a TFD, we offer it as more of a traditional finance product. It has the added value that that’s regulated. We have a UK license. We’ve got an EU license We’ve got an Australian license. And we’ve also got a Bahamas license. So I guess the consumer protections, the custody of client funds, that’s kind of like a key point in the way we offer crypto to traders. So a lot of the exchanges out there that are offering different perpetual swaps, that don’t have investment licenses, that there’s a lot of, you know, insecurities on where that client funds are being held. There’s very limited regulation, if any, for some of those brokers. So that’s probably one of the key points of our product. And then in terms of its actual, its pricing, and the number of assets that we offer, it’s also at the leading edge. So we’ve got it on our website comparison to some of the other competitors. So our pricing is lower, our spreads are lower for all of the major assets. And then also the actual range of assets were offering with 400 digital assets. And once you kind of start to use cross pairs of those, you’re moving into the, you know, the 1000s of pairs that we can offer for those coins. So they’re probably the key points. But But regulation and licensing is key at the moment.
Jefferson Nunn 6:32
Well, that’s actually really impressive. So it seems like you’re well positioned to move ahead for the long term to be an industry standard player I see. So along the same lines, there’s actually changing gears for a moment. So Patrick, tell me a little bit more about your background, how you got into crypto when you got into crypto and why crypto.
Patrick Murphy 7:02
Yeah, so I mean, I’ve kind of probably sat on the edge of crypto for a while I wish I would have jumped in a little bit quicker when I’ve kind of had different intersections with that industry. I moved over to London in 2015. And I started working for a large payments company. They’re now actually listed on the New York Stock Exchange Paysafe group, you may have heard them being kind of spooked on CNBC or something by by Mr. Cramer, back in the SPAC kind of period last year, but yeah, so they they’re a large payments firm, and I was working for them. They started partnering with Bitpay, back in 2015, to do crypto processing for different merchants. So I kind of started to see crypto starting to move into, you know, into payments and into the kind of traditional finance area. And that’s where I started to get into it a little bit. Paysafe also did their own started to a crypto exchange. So I was reviewing that and working on launching that with Paysafe. And so got involved with that more in 2017 & 18. And then yeah, in terms of the crypto derivatives, that’s kind of been the last probably twelve months or so, starting to see derivatives in the crypto market really get to the next level. And like seeing some some specific statistics on the spot trading to derivative trading, and how that’s maturing. As there’s more institutional investors. It’s kind of it’s happened quite quickly over the last two years where now the derivatives market is four times as large as the spot market in crypto. So yeah, I’ve kind of I’ve never really jumped in that far. But I’d say I’ve got a really good kind of knowledge of, you know, that kind of DeFi space. It’s always been in ways that crypto is intersecting with either payments or traditional financial products. So or even with banking and how they’re kind of supporting the industry. It’s that crossover between the crypto market and and the regulated financial market where I’ve kind of been involved a lot and that’s probably due to my kind of compliance and regulatory background is on how to kind of move, you know how Cryptos moving into that industry and moving to the next level.
Jefferson Nunn 10:08
Fascinating. And I got to say, I think a couple of these burned could have probably a better benefited from those types of compliance protections, for example, voyage or Celsius. So what do you think, could be done just overall as an industry. Is there a particular standard, you know, like the PCI standard to make sure that nothing blows up, but you’d like an card? Is there something like that that could be done for crypto exchanges?
Patrick Murphy 10:44
Yeah, I mean, definitely, like we I was just talking about this with with a couple of people from our risk and compliance team in the office here, like, we were just talking about how there’s been an announcement a few days ago of kind of fully fledged digital asset regulation in Europe, which is under mica, so they’re actually going to have a full regulation for all of the European countries that standardized, but I think it said something around the fact that it won’t really come into practice properly until 2024. So there’s kind of, there’s already been a large period of this kind of gray period for crypto, where, you know, there’s a lot of companies operating with a large amounts of client funds, without much supervision or rules. So it’s kind of up to the crypto exchange or, you know, custody provider to make the rules themselves, and kind of self regulate themselves. And, you know, some of them are probably doing it properly. But there’s always going to be people that are kind of breaking the rules. And, and one of the benefits of kind of breaking the rules at the moment, in respect to like Celsius, and probably some of the other exchanges is that if you don’t have any rules, that you have to keep client funds segregated, and in one spot, and supervised and reported, then you can, you can do something else with those client funds. So that’s what’s been happening where people have kind of been reinvesting client funds or assets to make an interest or make more money. And that’s fine when the markets going up. And it’s actually working, and they’re making money. But when the client when the when the market starts going the other way. You know, this is where a lot of these firms are probably, you haven’t seen them yet. But they don’t have all the client funds there anymore, or client assets. So as I think, you know, the founder of FTX said, there’s going to be more firms that will come out in the next couple of years that go under because they have got things happening behind the scenes that you don’t know about yet. So I think yeah, with Coinbase, as well, that happened a little bit earlier, where, you know, they had to talk about the fact that if they were to go under the client funds wouldn’t be protected. All these things are pretty standard core, you know, core rules in investment licenses, that if you take client funds or client assets, you have to segregate them from the company’s money. So I think we could have moved a lot quicker on those kinds of very basic rules with crypto regulation. So or even, you know, done better to apply some of the existing rules on financial products to crypto, just some of those basic overarching protections of client funds and client assets. It’s, it’s not going to impact the industry, it’s probably something that everyone, you know, is happy to take on. And that’s probably lagged a little bit. That’s been probably one of the biggest, the biggest issues for, you know, for consumers as well as the whole industry.
Jefferson Nunn 14:35
Fascinating. Yeah. I appreciate your insight on this. And I think further to that, one thing I have not seen too much up is the industry itself banding together to try to ensure that there isn’t too much overbearing legislation or regulation. At the moment, you know, it’s especially If you listen to GameStop, and AMC investors, it seems like even though there is some regulation, you know, there’s still some shenanigans going on within that space. So wants to make sure that, you know, there isn’t regulation that allows, if you will shenanigans that continue to go on within the crypto space.
Patrick Murphy 15:26
Yeah, I mean, I think there’s just so much to do in terms of the crypto regulation, that there just needs to be a starting point, as I said, just some of those basic fundamental consumer protections, market protections that need to be in place, there’s always going to be people, you know, pushing the edges of rules when there’s regulations. So that’s going to happen with every, you know, there’s going to be iterations of, of digital asset regulation, they’re always going to be chasing technology, because, as I just said, about this European regulation, if that’s, you know, being written, but it’s not going to come in till 2024, then by the time 2024, comes around, what else is going to be happening in the kind of web three space? That isn’t regulated? So it’s, there’s always going to be, you know, shenanigans, as you say, going on in, in the marketplace, but I think it’s just less so. There’s so many fundamental regulations and protections that need to be put in place, just as a starting point.
Jefferson Nunn 16:45
Yeah, I think I agree. And maybe if even if it’s more like, you know, like PCI, or any one of those standards, you know, we can make sure that, you know, even though it is updated after a year or two, at least through some protection, that defense and none, which is where we’re at now. So, at least you’re right, at least a basic protection, like, you know, no, you can’t read your client funds at your own personal piggy bank, things like that. So yeah, just basic stuff. Right.
Patrick Murphy 17:23
Yeah, I mean, they’ve kind of the probably the first step that the market took definitely in, in Europe and in Australia was making sure at least digital asset firms had to have AML money laundering financial crime processes in place. So that’s kind of was the first point and all of the companies are registered with their local kind of authorities to make sure that they’re doing some appropriate onboarding and transaction monitoring of customers. But I think, yeah, that big gap, which was spoken about and has been spoken about at all the recent conferences, like it was a huge topic at Bitcoin, Miami. And it was around custody, and just client funds, client assets. That’s the key thing where there’s no, although, you know, we’re making sure that funds aren’t being laundered use for financial crime. Those kinds of things are being looked at and supervised of these firms. There’s no supervision of client protections in terms of investments or trading or, you know, even if these companies go under, where are the client assets sitting? Where are the client funds sitting? So I think that’s, that’s just the key next step. I think everyone knows that. And it’s just being repeated now. But it’s still moving quite slowly to actually put that in place. And that’s where kind of that’s where Eightcap are providing, like a solution with our trading product, to kind of use this traditional, regulated financial product to offer something to consumers. So those companies that want to offer that to their customers in a secure regulated fashion, can do that over the next period of time, where there isn’t the appropriate regulation in some of the, you know, perpetual swaps and things that are being offered by some some other people in the markets.
Jefferson Nunn 19:45
Interesting. And then I guess, turning our attention to the technology itself. Do you think that crypto is really innovative over you know, traditional fiat currencies or what are your thoughts, your views on that?
Patrick Murphy 20:04
I mean, my thoughts are always changing. Like, as I said, I’m a real kind of novice in terms of in terms of crypto. So like, originally, when I started to see it come in, back at Paysafe has a kind of option of a different payment method, or a different store of value, I kind of saw that it was very similar to E money, which is, which is a term used a lot in Europe, I’m not sure if it’s used as much in in America, but we have kind of these, these institutions here, that are payment institutions that are allowed to hold people’s money, and classify it as a money once it’s kind of online or digital. So that would be it could be in euros or in pounds. And I kind of saw that very much like a similar thing to crypto at the start. Because what you do is you actually use your card or your bank account to purchase digital money, say on pay safes platform. So then you’re holding 1000 GBP, in digital money. And some of the concepts are very similar to crypto in that respect. And you could say that, that’s kind of like an early, you know, form of digital asset, this digital money that’s been that’s been around for, you know, 1520 years already. So in terms of using it as a payment method, I felt like this Emani was already kind of doing a lot of the things that people were saying could be done by crypto. But that was kind of one function like now I’m seeing more and more different digital assets and different kind of web three companies. They’re all using this technology for hundreds of different things. So I think in terms of payments, it’s just newer technology, better technology in terms of making payments and recording payments on blockchain. There’s, there’s just so many different use cases, it’s a lot, it’s a lot bigger than just one thing, which was probably focused on one area of crypto when I first started looking at it, and and now it’s just, it’s the next iteration of, you know, financial services of technology. It’s not just kind of, you know, 10 coins that you buy on an exchange. It’s a whole industry. So I definitely see it, you know, it’s here to stay. And it’s kind of the future now.
Jefferson Nunn 23:00
Yeah, it’s been a fascinating journey. And I know, a lot of folks have compared the growth to cryptocurrency to the growth of the internet. So to that end, I mean, if you had a crystal ball, and you can see perfectly into the future, you know, say 10 years from now, what do you think will happen next?
Patrick Murphy 23:23
Yeah, I mean, it’s, it’s a tough one, because so much happened. So much has happened in the last few years. I think, I think what will definitely happen, which we’re seeing now is a lot of the kind of, a lot of the companies that have been able to ride off the success in the last few years will kind of it was straight in line to the main companies that are doing things properly. So we’ve kind of already seen like FTX, as an example, is looks like a player in the market that knows what they’re doing. And they’re going to be a bit longer term company, out of this kind of bear market. And then you’ve seen you’ve seen companies like Celsius and and you’ll see more of the other ones that might not last. So I think, as, as EPS kind of said, in the tech, the tech bubble, or the Dot-Com Bubble, there’ll be a few few players that become bigger and bigger, and they last and then a lot of the smaller ones will drop off. So I think as we said, as well, further regulation, which which will definitely help the market. Hopefully, that’s put in properly and it’s not too overbearing for the market so it can kind of continue to to innovate and move at the same speed that it’s moving. So I think we’ll we’ll in a better position for more people to be able to get involved, and to get involved securely, and be protected as as users. But I also see that if it kind of keeps going that way, a lot of the original principles of crypto have been kind of a flatter level of, you know, DeFi will kind of it will move, you know, with regulation. And, you know, some larger players taking over the market more and more, it will kind of emulate what’s happened previously in financial services. So, I’m not sure how they’re going to solve some, you know, a handful of companies becoming the next Amazon, Facebook, Google, because I think that’s, that’s going to happen. And, you know, a lot of people would say, that hasn’t been a great thing for for kind of the tech industry. So yeah, it’s, it’ll be interesting. I’m not quite sure. I think my answer is.
Jefferson Nunn 26:07
No, I think you covered it. And that was really, really interesting and insightful. So yeah, I tend to agree, I think there’s gonna be a lot of growth over the next 10 years. I suspect we’ll see the next Amazon come out of this. But I have, actually, at this moment, this moment, no idea what that might look like. But I really think we’re headed in that particular direction. So this has been a fascinating show. Do you have any final thoughts for our listeners?
Patrick Murphy 26:43
No, not nothing else for may just to get over to get over a cap and check it out. And if you’re, if you’re listening from a company that want to offer, crypto derivatives, you know, we have a, we’ve got an API solution where we can help you offer that to your customers. So yeah, if you want to hit us up on LinkedIn, or email us I’ll share the details with you to share with your listeners. But yeah, just that’s it for me.
Jefferson Nunn 27:19
Cool deal. Well, thank you very much for coming on to the show. Patrick. It’s been very insightful. And if you want to check out Eighcab, it www.eightcap.com. The links, as Patrick mentioned, are going to be at the top of the show page. And thanks again for listening.
Patrick Murphy 27:40
Thanks very much.
If you are hearing this message, you’ve listened to our new episode all the way to the end. And for that I thank you from the bottom of my heart. And I hope you enjoyed this episode. If you did, please review the episode on podcast.co or tell a friend about it and feel free to suggest future episode topics. This is Jefferson Nunn signing off until the next episode of Around the Block.
