Are crypto and blockchain safe for children, or should more measures be taken?

Crypto is becoming mainstream and especially the younger generation of the world is noticing this. Cryptocurrency exchange Crypto.com recently predicted that crypto users worldwide could reach 1 billion by the end of 2022. Further findings show that millennials — who are between the ages of 26 and 41 — are turning to investing in digital assets to build wealth. According to a study conducted in 2021 by personal loan company Stilt found it that, according to user data, more than 94% of people who own crypto were between the ages of 18 and 40.

Keeping kids safe

While the increased interest in cryptocurrency is noteworthy, some are concerned about the way people under the age of 18 interact with digital assets. These challenges were highlighted in UNICEF’s recent “Outlook for Children in 2022” report, which examines the impact global trends may have on children, including concerns about the widespread adoption of cryptocurrency.

Melvin Breton Guerrero, policy specialist for UNICEF’s Office of Global Insight and Policy, told Coin-Crypto that he wrote the digital currency portion of the report. According to Guerrero, this part of the document is very relevant because the cryptocurrency industry is still developing and therefore requires child protection:

“We must take steps to prevent harm to children that could be caused by third parties engaged in cryptocurrency or self-inflicted harm. As such, we need to prepare children under 18 for a future where cryptocurrencies and blockchain applications will become a part of everyday life, just like the internet.”

While there are no official safeguards for children when it comes to accessing crypto and blockchain applications, Guerrero explained that age verification is one of the most important factors to consider. “We need to ensure that minors do not improperly engage in blockchain applications or misuse cryptocurrencies,” he noted.

Given the anonymity of cryptocurrency transactions, Guerrero is aware that anyone can set up and open a cryptocurrency wallet. He added that some online cryptocurrency exchanges do not question the age of their users. “A kid can transact with different crypto wallets and nothing can be done about it,” Guerrero said.

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 years of age or older. For example, Coinbase’s website explicitly states that users must be 18 years of age or older to access its services. Before this policy was implemented in July 2017, Coinbase allowed users of at least 13 years of age with parental consent to access its services.

It is 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 portfolio company of the Gemini Frontier Fund, and allows parents to invest in their children’s financial future.

Caleb Frankel, co-founder and chief operating officer of EarlyBird, told Coin-Crypto that the offering is focused on providing access to digital assets so that parents can invest on behalf of their children:

“Each account is managed by a parent or guardian over the age of 18. We believe crypto is part of a balanced modern portfolio and prioritize educating 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 to ensure the development of a secure crypto ecosystem. While progress is still being made, Guerrero noted that it is important to ensure new wallets are always made by someone of legal age. While kids don’t initially make the wallet, Guerrero believes this is a solution to make sure they use cryptocurrency properly.

Unfortunately, other challenges can arise when children gain access to cryptocurrency. For example, 2021 saw an increase in crypto scams, and kids who are 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 that focuses on fighting human trafficking by monitoring cryptocurrency transactions — told Coin-Crypto there are many risks to consider when children engage in sexual intercourse. engage cryptocurrency:

“The scams and fake platforms are risks for minors. Online predators are experts at tracking down and exploiting inexperienced humans. Data breaches, identity theft or fraud can be committed on behalf of the child without their knowledge. Children are also more likely to lose a private key, but this happens even with adults.”

As such, Cameron believes that acquiring digital assets will make children a target for criminals. “Until crypto exchanges collectively add more verification and authentication measures when opening an account, children’s privacy is at risk. Ideally, anyone under the age of 18 should provide documents from their parents as permission to open an account,” he noted.

Is blockchain a double-edged sword?

In addition to concerns about cryptocurrency, blockchain technology could also have unintended consequences for minors. For example, Guerrero explained that blockchain can be harmful to children because recorded information is permanent and immutable, and this immutability can violate current regulations:

“The European Union’s ‘right to be forgotten’ is contained in Article 17 of the General Data Protection Regulation, or GDPR. This means that children who voluntarily provide their information when they don’t necessarily understand the consequences should have the right to have that information removed once they are of legal age. But blockchain by definition does not allow the deletion of information. So, how can we protect children’s data in this case?”

In addition, Guerrero pointed out that while blockchain applications could help migrant children have a portable identity to access goods and services, they could also be used as a form of surveillance. Given these concerns, he stressed that there must be a balance in leveraging the benefits of blockchain technology: “Having this balance is important, and the blockchain and crypto community should keep this in mind when building new applications. .”

Fortunately, some organizations are making progress on this front. For example, while UNICEF has recognized the challenges associated with the adoption of digital currencies and children, the organization is aware that blockchain technology could be used for good.

Sunita Grote, head of the ventures team for UNICEF’s Office of Innovation, told Coin-Crypto that her office has been exploring the use of blockchain through its venture fund. “This fund provides seed funding to test open source solutions that have the potential to accelerate outcomes for children. Blockchain is one of the technology areas we are exploring,” she said.

In particular, Grote believes that blockchain-based solutions allow organizations and individuals to rethink how problems can be solved due to their improved transparency, efficiency in systems and better coordination of data between multiple parties. With this in mind, Grote understands the potential blockchain can have when it comes to responding to the threats to children in the online environment. She recently shared UNICEF’s venture fund invested in two startups developing open-source, AI-powered solutions to address digital risks to children.

On the other hand, Grote also understands that blockchain can increase the exposure risk of children and online harm: “Being online can increase traditional threats and harm that many children already face offline and can further increase the vulnerabilities with online risks as well.”

Calling on the blockchain community to protect children

Given the risks associated with crypto and blockchain related to minors, Guerrero said it is up to the blockchain and crypto community to help ensure the well-being of children in the future. “The blockchain and crypto community should use their deeper technical knowledge to actively engage with the children’s rights community,” he noted.

As a solution, Guerrero believes that blockchain applications should have built-in KYC requirements. This may be easier said than done as he also believes that KYC remains an open question for crypto wallets and exchanges. While KYC requirements can be challenging, Guerrero noted that having more educational tools will benefit the well-being of minors getting involved in crypto and blockchain. This may be a more realistic solution for the time being, as several educational initiatives are already underway.

For example, in 2021, Gemini partnered with Learn & Earn, an app that teaches students about financial literacy while earning fiat rewards. In addition to exchange initiatives, some governments are taking it upon themselves to educate young people about crypto. Last year, Colombia funded a mobile app, board game and book to educate young people about investing in cryptocurrencies and the stock market.

Other organizations are also developing additional educational projects. Aaron Kahler, founder and CEO of ATII, told Coin-Crypto that ATII regularly hosts child safety training and lectures on how to keep minors safe when dealing with digital assets and blockchain applications: “We are organizing a summit on the topic in May that will include a “dark webathon” and a child safety day. We also bring in people from law enforcement and other organizations to talk about child safety.”

Leave a Comment