A surprising number of children have invested in online cryptocurrencies as a way to "secure their future" - almost one in four aged 13 to 16 are either investing in them or considering doing so. The findings are revealed in a report launched today by Internet Matters, which urges parents to talk to their children about the risks of being targeted by scammers and calls on the government to do more to address the dangers.
The report shows that 8% of children have already invested in cryptocurrencies despite the risks of scams, while 15% of children are looking to invest. The main reason (49%) given was to secure their financial future – worrying given the level of financial risk involved in trading cryptocurrencies, especially in the context of the cost of living crisis.
Four in 10 (40%) of those who signed up for crypto or would, said it was “to make big money,” while 38% saw it as “the future of money” . Almost one in 10 children surveyed (9%) had invested in non-fungible tokens (NFTs).
The report showed that the main concern of parents and children familiar with crypto-assets, including those who would not consider investing in them, was the risk of falling victim to cryptocurrency or cryptocurrency scams. NFT. The top three risks cited by parents and children are victims of fraud or scams (46%), children being exploited and encouraged to buy crypto (35%), and people trying to target or steal from children ( 35%).
Internet Matters is today calling on the government to take more action to protect children from these dangers. The Financial Conduct Authority is targeting more UK crypto businesses with an increasing number of fake investment scams being investigated as the most vulnerable in society including children are targeted by scammers.
The report stresses that children should be given due consideration by policymakers when formulating regulations regarding crypto-assets, rather than treating their needs as a secondary concern. In the government's 82-page consultation paper on crypto-asset regulation, the words "children", "young people", "parents" or "families" do not appear anywhere.
And despite the impact that financial damage can have on children's lives, it generally falls outside the scope of the Online Safety Bill, with the exception of fraudulent paid advertising. Internet Matters calls for new anti-fraud lessons, promised in the recent fraud strategy, to focus on online scams and crypto-assets.
The continued involvement of parents and professionals such as teachers in this area is of significant importance. This underlines the relevance and value of the media literacy strategies recently published by the government and Ofcom. In the absence of regulations to protect children from the risks of NFTs and cryptocurrencies, Internet Matters has provided parents with advice on how to protect their children from these dangers.
Simone Vibert, Head of Policy and Research at Internet Matters, said: "Despite children's interest in crypto-assets, the unregulated crypto market is full of scammers who take advantage of users, including children, who seek to invest in their future Although children are aware of this risk, this does not necessarily prevent them from becoming involved.
“Our new report paints a worrying picture. If more children become involved with these digital assets, there must be better protection for them, as we know that online financial scams are common. It is welcome that the government steps in and regulates crypto-assets, but it needs to recognize that children are meddling in this space and respond appropriately.
Katie Watts, Head of Campaigns at MoneySavingExpert, said: "This report highlights a real gap in the protection of young people who see crypto as part of their financial life, but are rightly worried about the consequences - and in especially scams.
"Fraud is the crime people in the UK are most likely to fall victim to, and crypto, with its promise of big returns, is a huge feature. Scammers are using every trick in the book to get people to part with their money - including jumping on cost of living scares and 'cool' crypto trends Not only do they fraudulently steal real crypto-assets, but they also trick victims into buying fake schemes that don't don't exist at all.
“The Online Safety Bill, when it comes into force, will require social media companies and search engines to prevent and remove fraudulent advertisements they are paid to post. But the law will only cover not all forms of online advertising, such as advertisements that are seen by both children and adults on other websites. This is why the government must act quickly in its work of investigating the rest of the online advertising market, in order to close this doorway for scammers to target consumers - especially children - leaving their limited finances, mental health and self-esteem in shambles before their financial lives are even n really started."
Investing in crypto-assets inherently carries some risk, but if you decide to do so, here are Internet Matters expert tips to protect your children from NFT and crypto scams:
By taking these steps, you can help your children navigate the world of NFTs and cryptocurrencies safely, while instilling responsible financial habits and critical thinking skills.
The best way to protect children from risk is to prevent them from buying/selling/trading it, but for those who choose to participate, please follow these tips to help reduce risk:
1. inquire : Learn more about NFTs, cryptocurrencies and the risks associated with them. Remember that crypto-assets are not regulated in the same way as normal financial services, so you will have limited protection, if any, in case something goes wrong. Internet Matters has a page on its website - https://www.internetmatters.org/resources/what-are-nfts-and-cryptocurrency/
2. Encourage children to apply a "Should I trust this?" control List - This should include asking yourself these questions:
● Do I trust the cryptocurrency website URL is legit? Check against other sources such as social media profiles and price tracking websites.
● Is this trending cryptocurrency too good to be true? Don't buy into the hype, do your homework first, anything heavily promoted isn't real.
● Is this post from an influencer real advice or an advertisement? All posts promoted by influencers should be reported, pay attention to #Ad on the post.
3. Do research before investing - Advise your child to search the cryptocurrency name or company with keywords such as "scam", "fake" and "review" to see if there is any mention of potential risks around it 'She.
4. Keep apps official - Download crypto mobile apps from official stores like Google Play and Apple App Store. If your child is prompted to download them outside of these stores, it's called "sideloading" and they run the risk of downloading a fake mobile wallet and having their cryptocurrency stolen.
5. Keep credentials private - Encourage your child to never share cryptocurrency wallet information with anyone. People may ask for it to let you participate in an investment opportunity, but it can be a scam to steal your money.
6. Stay up to date: Stay informed of the latest scams and fraud schemes in the crypto space. Subscribe to reputable news sources such as the Internet Matters website and Money Saving Expert to keep up with industry experts and stay ahead of emerging threats.
7. Discuss the value of NFTs and their evolution. As the value of NFTs goes up and down with trends, it is important to talk to young people about what a realistic amount to invest looks like and the potential for NFTs to go down in value very quickly so that they are aware of the risk.
8. Report any scams - If you believe that you have been the victim of an NFT scam or if you believe that you have been the target of one, you can report it to the NFT platform so that they can investigate. You can also report it to Action Fraud online at www.actionfraud.police.uk. –
For more information on how to keep your children safe online and step-by-step guides, visit internetmatters.org