Warning from experts as kids purchase cryptocurrency

Unexpectedly many young people have made online cryptocurrency investments to « secure their future, » with almost one in four of those between the ages of 13 and 16 either having already done so or planned to. The information is disclosed in a study released today by Internet Matters, which urges parents to talk to their children about the dangers of being the target of scams and calls on the government to take more action to solve the issues.

Despite the possibility of frauds, the study finds that 8% of kids have actually made investments in cryptocurrency, and another 15% are considering doing so.

The main motivation (provided by 49%) was to safeguard one’s financial future, which is concerning considering the degree of financial risk associated with trading in cryptocurrencies, especially in light of the crisis in the cost of living.

Four in ten (40%) of individuals who have signed up for cryptocurrency or plan to do so stated that their goal is to « earn lots of money, » while 38% consider it to be « the future of money. » Nine out of ten of the youngsters polled (9%) have purchased non-fungible tokens.

According to the study, parents and kids who are familiar with cryptoassets—including those who would not contemplate investing in them—are more worried about the possibility of falling for cryptocurrency or NFT scams.

Parents and children agree that the top three hazards include becoming a victim of fraud or scams (46%), children being used and encouraged to purchase cryptocurrencies (35%), and individuals attempting to target or steal from minors (35%).

In order to better safeguard children from these risks, Internet Matters today urges for further government action. As an increasing number of phony investment schemes are being looked into by the Financial Conduct Authority, more UK crypto enterprises are being targeted by con artists who prey on the most defenseless members of society, including minors.

The paper emphasizes the necessity for politicians to give children’s needs proper attention rather than considering them as a secondary priority when drafting legislation pertaining to cryptoassets.

The terms « children, » « young people, » « parents, » or « families » do not appear anywhere in the government’s 82-page consultation paper on cryptoasset regulation.

And while though financial injury to children can have a negative influence on their life, it is mostly beyond the purview of the Online Safety Bill, with the exception of sponsored scam advertising. Internet Matters is urging the current Fraud Strategy to include an emphasis on online frauds and cryptoassets in new anti-fraud education.

It is crucial that parents and experts in the field, such teachers, continue to be involved in this. The importance and benefit of the Government and Ofcom’s recently unveiled media literacy programs are highlighted by this.

Internet Matters has offered guidance to parents on how to shield their children from these hazards in the absence of legislation intended to safeguard them from the perils of NFTs and cryptocurrencies.

« Despite children’s interest in cryptoassets, the unregulated crypto market is rife with scammers who prey on users, including children, looking to invest in their futures, » said Simone Vibert, Head of Policy and Research at Internet Matters. Despite the fact that kids may be aware of the risk, they may still participate despite it.

“Our new report paints a concerning picture. If more children are getting involved with these digital assets then there needs to be better protection for them as we know online financial scams are common. It is welcome that the government is stepping in and regulating cryptoassets, but it needs to acknowledge that children are dabbling in this space and respond appropriately.”

MoneySavingExpert’s Head of Campaigns, Katie Watts, said this research highlights a major gap in safety for young people who view cryptocurrency as a part of their financial life but are understandably concerned about the implications, especially scams.

In the UK, fraud is the crime that victims are most likely to experience, and cryptocurrency, with its large profits promised, plays a significant role in this. Scammers employ all available strategies to persuade victims to hand over their money, including capitalizing on concerns about rising living expenses and ‘cool’ crypto trends. In addition to deceiving people into paying for phony schemes that don’t exist at all, they also steal legitimate cryptoassets.

« The Online Safety Bill, when it becomes law, will place a duty on social media firms and search engines to prevent and take down scam adverts that they are paid to publish. But the law won’t cover all forms of online advertising, like ads that are seen by both children and adults on other websites. That’s why the Government must move at speed on its work investigating the rest of the online advertising market, to close this gateway for scammers to target consumers – especially children – leaving their limited finances, mental health and self-esteem in ruins before their financial lives have even really begun. »

Although there are inherent dangers associated with investing in cryptocurrencies, if you do so, follow these advice from Internet Matters’ experts to protect your kids from NFT and cryptocurrency scams:

You may teach your kids responsible financial practices and critical thinking abilities while also assisting them in navigating the world of NFTs and cryptocurrencies securely by following these steps.

The easiest method to shield kids from the hazards is to prevent them from purchasing, selling, or trading in them, but if they do choose to participate, kindly heed these advices to lessen the risks:

1. Become informed: Get to know NFTs, cryptocurrencies, and the dangers they pose. You won’t have much protection, if any, if something goes wrong because cryptoassets are not regulated the same way as traditional financial services. The website of Internet Matters features a page.

2. Encourage children to use a « Should I Trust This? » checklist. They should think about whether they can answer the following questions:

  • Do I believe that the cryptocurrency website’s URL is valid? Compare your results to those from other sources, such as social media profiles and price-tracking websites.
  • Can this popular cryptocurrency really be so good? Don’t believe the hype; instead, do your research first. Not everything that is widely advertised is true.
  • Is this post from an influencer legitimate advice or a commercial? Keep an eye out for the hashtag #Ad on any posts that influencers endorse.

3. Conduct research before investing – Tell your child to search for the cryptocurrency’s name or firm along with terms like « scam, » « fake, » and « review » to see if there are any references to any problems associated with it.

4. Keep applications official – Only download cryptocurrency apps from legitimate app shops like Google Play and the Apple App Store. The practice of asking your child to download them outside of these places is known as « sideloading, » and it puts them at danger of installing a fraudulent mobile wallet and having their bitcoin taken.

5. Keep login information secret – Tell your youngster to never reveal the contents of their bitcoin wallet to anybody. People may ask for it so that you may participate in an investment opportunity, but it might also be a hoax to get your money.

6. Keep up with the times: Keep up with the most recent fraud and scam tactics in the cryptocurrency industry. Follow industry leaders to keep ahead of emerging risks by subscribing to trustworthy information sources like the Money Saving Expert website and the Internet Matters website.

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