Crypto is becoming mainstream and especially the younger generation is starting to notice. Cryptocurrency exchange Crypto.com predicted recently that the number of crypto users would reach 1 billion by 2022. Additional findings reveal that Millennials, those aged between 26 and 41, are increasingly turning to digital asset investing to increase their wealth. Stilt, a personal loan company, conducted a 2021 study that found that more than 94% of crypto-owners were between 18-40 years old.
Keeping children safe
While cryptocurrency has been gaining popularity, there are still concerns about how children under 18 interact with digital assets. UNICEF’s “Prospects For Children in 2022” report highlighted these challenges. It examines the effects of global trends on children and concerns about mainstream adoption of cryptocurrency.
Melvin Breton Guerrero is a policy specialist at UNICEF’s Office of Global Insight and Policy. He told Cointelegraph that the section on digital currencies was his own work. Guerrero said that this section of the report is very relevant as the cryptocurrency industry is still in its development and requires child safeguards.
We must take precautions to avoid harm to children from third-parties using cryptocurrency or self-inflicted damage. We must prepare children below 18 years old for a future in which cryptocurrencies and blockchain applications will be part of daily life, just like the internet.
Guerrero stated that although there are not any official safeguards for children accessing crypto or blockchain applications, Guerrero said that age verification is one of the most important considerations. He said, “We must ensure that minors do not misuse cryptocurrencies or engage in wrongly with blockchain applications.”
Guerrero knows that anyone can create and access a cryptocurrency account, due to the anonymity of cryptocurrency transactions. Guerrero said that many online cryptocurrency exchanges do not ask about the age of their users. Guerrero said that a child can use multiple crypto wallets and that nothing is impossible.
Although crypto is technically open to all ages, major cryptocurrency exchanges require that you know your customer (KYC), in order to make sure that you are at least 18 years old. Coinbase’s website, for example, clearly states that users must have 18 years or older in order to access its services. Coinbase allowed users aged 13 and older to access its services before this policy was adopted in July 2017.
It is also worth noting that Gemini, a cryptocurrency exchange based in the United States, offers custodial accounts to minors. The company published a blog post on January 25 explaining that the new service was powered by EarlyBird (a portfolio company of Gemini Frontier Fund) and allows parents to make investments in their children’s future financial security.
Caleb Frankel is co-founder and chief operational officer of EarlyBird. He told Cointelegraph that the offering focuses on giving parents access to digital assets that they can use for their children’s investment.
“Each account must be held by a parent/guardian who is at least 18 years old. Crypto is an important part of a modern portfolio. We are committed to educating families and encouraging the next generation of investors, as the digital asset markets mature.
Frankel stated that EarlyBird not only works with Gemini, but also actively engages with regulators to help ensure the creation of a secure and safe crypto ecosystem. Guerrero said that while there are still some progresses, it is important to make sure new wallets are created by someone of legal age. Guerrero believes that this is one way to ensure children properly use crypto funds, even though they don’t create them initially.
Children who have access to cryptocurrency can face other problems. Children who have never been exposed to cryptocurrency are more likely to fall prey to scammers than ever. This is why 2021 saw an increase of crypto-scams. Larry Cameron, chief information security officer at the Anti-Human Trafficking Intelligence Initiative – an organization that monitors cryptocurrency transactions and combats human trafficking – told Cointelegraph there are many dangers when children get involved in cryptocurrency.
“Namely, scams and fake platforms pose risks to minors. Online predators know how to exploit inexperienced people. Without the knowledge of the child, data breaches, identity theft and fraud can all be done in their name. Although children are more likely to lose their private keys, this can happen to anyone.
Cameron is concerned that children will be a target of criminals if they are able to acquire digital assets. Children’s privacy is at risk unless crypto exchanges add additional authentication and verification measures to account opening. He noted that anyone younger than 18 years old would be required to present documentation from their parents to open an account.
Blockchain is a double-edged sword
Blockchain technology could also have unintended consequences for minors, in addition to the concerns about cryptocurrency. Guerrero explained, for example, that blockchain technology could cause harm to children as the information stored is permanent and immutable. This immutability could also conflict with existing regulations.
“The General Data Protection Regulation (or GDPR) Article 17 states that the European Union has a ‘right of being forgotten.” This means that children who give their data without understanding the consequences have the right to have that information deleted when they reach legal age. However, blockchain by definition does not allow the deletion of information. How can we safeguard children’s data?
Guerrero also pointed out that although blockchain applications can be used to provide migrant children with a portable identity for accessing goods and services, they could also serve as surveillance tools. These concerns prompted Guerrero to stress that it is crucial to strike a balance in order for blockchain technology’s benefits to be fully utilized. “Having this balance is essential, and the crypto and blockchain community must remember this when developing new applications.”
Some organizations are making some progress in this area, however. UNICEF, for example, is well aware of the potential benefits of blockchain technology.
Sunita Grote is the head of UNICEF’s ventures team. She told Cointelegraph her office has been looking into blockchain using its venture fund. This fund provides seed financing to test open-source solutions which have the potential for accelerating results for children. She said that blockchain is one area we are currently exploring.
Grote believes that blockchain-based solutions can help individuals and organizations rethink how problems can be solved. This is because of their increased transparency, efficiency in systems, and better coordination between data from multiple parties. Grote is aware of the potential blockchain has to address the dangers for children online. She also shared with us that UNICEF’s Venture Fund recently invested in two startups using open-source AI to address digital threats to children.
Grote, on the other hand, recognizes that blockchain can increase children’s risk and harm online. “Being online can magnify existing threats and harms for many children and can further increase vulnerability to online risks.”
Protecting children by calling on the blockchain community
Guerrero stated that crypto and blockchain pose risks to minors and suggested that the crypto and crypto community should work together to ensure children’s well-being. He noted that the blockchain and crypto communities must use their technical knowledge to engage with the child-rights community.
Guerrero believes that blockchain applications should include KYC requirements as a solution. Although this may seem easier than it should be, Guerrero believes that KYC is still an open question for exchanges and crypto wallets. Guerrero pointed out that although KYC requirements can be difficult, having more educational tools will help the well-being and development of minors interested in crypto and blockchain. This might be a better solution, since several educational initiatives have already been started.
Gemini partnered in 2021 with Learn & Earn to teach students financial literacy and earn fiat rewards. Some governments have taken it upon themselves, in addition to the exchange initiatives, to educate youth about crypto. Colombia funded last year a mobile app, boardgame, and book to help young people learn about investing in crypto and the stock market.
Additional educational projects are being developed by other organizations. Aaron Kahler is the founder and CEO at ATII. He explained to Cointelegraph that ATII hosts regular child safety training sessions as well as lectures on how to keep minors secure when using digital assets and Blockchain applications. “We will host a summit in May on this topic that will include a dark webathon’, and child safety day. We also invite representatives from law enforcement agencies and other organizations to talk about child safety.