Crypto is going mainstream, and the world’s younger generation, in particular, is taking note. Cryptocurrency exchange Crypto.com recently predicted t
Crypto is going mainstream, and the world’s younger generation, in particular, is taking note. Cryptocurrency exchange Crypto.com recently predicted that crypto users worldwide could reach 1 billion by the end of 2022. Further findings show that Millennials — those between the ages of 26 and 41 — are turning to digital asset investment to build wealth. For example, a study conducted in 2021 by personal loan company Stilt found that, according to its user data, more than 94% of people who own crypto were between 18 and 40.
Keeping children safe
While the increased interest in cryptocurrency is notable, some are raising concerns regarding the ways those under the age of 18 are interacting with digital assets. These challenges were highlighted in UNICEF’s recent “Prospects for children in 2022” report, which examines the impact that global trends may have on children, including concerns around the mainstream adoption of cryptocurrency.
Melvin Breton Guerrero, policy specialist for UNICEF’s Office of Global Insight and Policy, told Cointelegraph that he wrote the section of the report on digital currencies. According to Guerrero, this portion of the document is highly relevant because the cryptocurrency industry is still developing and, therefore, requires child safeguards:
“We need to take steps to prevent harm to children that could occur by third-parties engaging with cryptocurrency or from self-inflicted harm. As such, we need to prepare children under the age of 18 for a future where cryptocurrencies and blockchain applications are going to be a part of everyday life, just as the internet is.”
Although there are no official safeguards in place for children when it comes to accessing crypto and blockchain applications, Guerrero explained that one of the most important factors to consider is age verification. “We need to make sure that minors are not wrongly engaging with blockchain applications or misusing cryptocurrencies,” he remarked.
Given the anonymity of cryptocurrency transactions, Guerrero is aware that anyone can set up and access a cryptocurrency wallet. He added that some online cryptocurrency exchanges don’t question the age of their users. “A child can transact using various crypto wallets, and nothing can be done,” said Guerrero.
While there are technically no age restrictions when it comes to crypto, most major cryptocurrency exchanges have Know Your Customer (KYC) requirements to ensure that users are 18 or older. For example, Coinbase’s website explicitly states that users must be 18 or older to access its services. Before this policy was implemented in July 2017, however, Coinbase did allow users who were at least 13 years of age to access its services with parental consent.
It’s also interesting to note that the United States-based cryptocurrency exchange Gemini offers custodial accounts for minors. A company blog post published on Jan. 25 explains that the new service is powered by EarlyBird, a Gemini Frontier Fund portfolio company, and allows parents to invest in their children’s financial futures.
Caleb Frankel, co-founder and chief operating officer of EarlyBird, told Cointelegraph that the offering is focused on providing access to digital assets so that parents can invest on behalf of their children:
“Each account is held by a parent or guardian over the age of 18. We believe that crypto is part of a balanced modern portfolio and are prioritizing the education of families and the next generation of investors as digital asset markets mature.”
Frankel added that EarlyBird is not only working with Gemini but also proactively with regulators as well to ensure the development of a safe, secure crypto ecosystem. While progress is still being made, Guerrero commented that it’s important to ensure new wallets are always created by someone of legal age. Even though children don’t initially create the wallets, Guerrero believes this is one solution to ensure they properly utilize crypto funds.
Unfortunately, other challenges can also arise when children gain access to cryptocurrency. For instance, 2021 saw an increase in crypto scams, and children inexperienced in the sector are likely to be more vulnerable. Larry Cameron, chief information security officer of the Anti-Human Trafficking Intelligence Initiative (ATII) — an organization focused on combating human trafficking by monitoring cryptocurrency transactions — told Cointelegraph that there are many risks to consider when children dabble in cryptocurrency:
“Namely, the scams and fake platforms are risks for minors. Online predators are experts at seeking out inexperienced people and exploiting them. Data breaches, identity theft or fraud can be accomplished in the child’s name without their knowledge. Children are also more likely to lose a private key, but this happens even to adults.”
As such, Cameron believes that acquiring digital assets will make children a target for criminals. “Until…
cointelegraph.com