Surprising numbers of children have invested in cryptocurrencies online as a way to ‘secure their future’ – with nearly one in four aged between 13 and 16 either investing in them or planning to.
The findings are revealed in a report launched today by Internet Matters, which is urging parents to speak to their children about the risks of being targeted by scammers and calling the government to do more to address the dangers.
The report shows that 8% of children have already invested in cryptocurrencies despite the risk of scams, while 15% of children are looking to invest.
The top reason (49%) given was to secure their financial future – worrying given the level of financial risk involved in trading in cryptocurrencies, especially against the backdrop of the cost of living crisis.
Four in 10 (40%) of those who have signed up to crypto or would do, said it was ‘to earn lots of money’, while 38% saw it as ‘the future of money’.
Nearly one in 10 children surveyed (9%) had invested in non-fungible tokens (NFTs).
The report showed that the primary concern among both parents and children who are familiar with cryptoassets, including the ones who would not consider investing in them, was the risk of falling victim to cryptocurrency or NFT scams.
The top three risks cited by parents and children are falling victim to fraud or scams (46%), children being taken advantage of and encouraging them to buy crypto (35%) and people trying to target or steal from children (35%).
Internet Matters today calls for more action to be taken from the government to protect children from these dangers.
The Financial Conduct Authority is targeting more UK crypto firms with a growing number of fake investment scams being investigated as the most vulnerable in society, including children are being targeted by scammers.
The report highlights that children should be given due consideration by policymakers when formulating regulations concerning cryptoassets, rather than treating their needs as a secondary concern.
In the government’s 82-page consultation paper on cryptoasset regulation, the words ‘children’, ‘young people’, ‘parents’ or ‘families’ do not appear anywhere.
And despite the impact financial harm can have on children’s lives, it is mostly out of the Online Safety Bill’s scope, with the exception of paid-for scam advertising.
Internet Matters is calling for new anti-fraud lessons, promised in the recent Fraud Strategy, to include a focus on online scams and cryptoassets.
The ongoing involvement of parents and professionals such as teachers in this area is of significant importance. This underlines the relevance and value of recently released media literacy strategies by the Government and Ofcom.
In the absence of regulation designed to protect children from the risks of NFTs and cryptocurrencies , Internet Matters has provided parents with advice on how to support their children from these dangers.