Teens taking high-risk gamble on cryptocurrencies, FCA warns

More than 250,000 children between the ages of 13 and 16 own cryptocurrency, the city’s regulator warns.

Nikhil Rathi, chief executive of the Financial Conduct Authority, has raised the alarm about the growing financial vulnerability of teenagers, with 8 per cent of 13-16 year olds holding this risky asset.

There is growing concern that children are at risk of fraud, theft and malware by owning digital currencies.

Rathi said a recent report on financial education “shed light on how children are handling money at increasingly younger ages and how vulnerable they are to online marketing”.

He said: ‘Financial apps are now available to children as young as six, while 8 per cent of 13-16 year olds own high-risk crypto assets, sometimes confusing gambling, trading, investing and entertainment.’

According to official population estimates, that is equivalent to a quarter of a million teenagers.

Children are increasingly gaining access to digital money, allowing them to manage it online and via smartphone apps, as the use of cash declines.

While some investors have made money from cryptocurrencies like Bitcoin, these currencies are risky.

The FCA last year warned of the risks of cryptoassets, which are highly volatile, difficult to spend and largely unregulated. And crypto exchanges have become a target for hackers.

According to the FCA, around 9 percent of adults (5 million people) owned cryptocurrency as of August 2022.