With more young people taking an interest in trading cryptocurrency and NFTs, it’s important to understand the risks.
Expert Ademolawa Ibrahim Ajibade shares insight into how parents can support their children’s interests while keeping them safe.
While the early interest in financial services is laudable, there are significant concerns regarding the ways interaction with digital currencies may affect children. Those concerns were emphasised in UNICEF’s 2022 Prospects for children report*. The report listed “mainstream adoption of digital currencies” as one of the major global trends expected to have a significant impact on children over the next 3 years.
Like almost every other financial foray, cryptocurrency trading poses significant risks to children especially when they are unsupervised. Aside from the general risks such as volatile prices and attacks by hackers on blockchain networks, there are certain dangers that children specifically need protection from.
The crypto worlds is rampant with hacks and phishing attacks. Attackers are always on the prowl to take advantage of inexperienced users such as children. And those who fall victim may lose their crypto assets and feel traumatised by the experience.
Phishing is a type of cyber attack where criminals use a series of seemingly harmless emails, phone calls or text messages to get personal or sensitive account information from people. It is important for parents to talk to their kids and teens and explain how a suspicious phishing message could look like what they should do if they get one.
Learn about phishing and ransomware.
Counterfeiting is a huge problem in the blockchain space, especially when it comes to NFTs. Without proper guidance, teens risk being scammed into buying a fake or inauthentic artwork that is totally worthless in the secondary markets.
In spite of innovative feats achieved with blockchain technology, the crypto world is still filled with a lot of get-rich-quick schemes.
Anonymity provides cover for criminals who make use of Telegram groups, Discord servers, and Twitter accounts. With these platforms, they spread fake reviews and build a community of unsuspecting investors interested in trading cryptocurrency and NFTs.
Scammers might trick them into investing in a fake project, promising a lot of rewards. Sometimes they even recruit a celebrity or influencer to help them draw in more people. As a result, they can pump up the price of the project’s native token. Once the price rises significantly, the faceless team of scammers quickly sell off their tokens and stop providing any updates to the victim investors.
In October 2022, the US Securities Exchange Commision (SEC) fined popular American celebrity Kim Kardashian for participating in one such crypto pump and dump scam.
Trading cryptocurrency and NFTs requires some level of online money management. For instance, accessing financial services online typically requires kids to provide some personal information, such as full name, home address and a credit card number or other method of payments. As such, if a young person gives this information out to untrustworthy sources, they could be at risk of identity theft.
Cyber criminals might then proceed to either hack into their account to steal funds or commit other nefarious activities while assuming their identity. For example, they could open a trading account in their name to commit fraud.
Learn more about cyber security and how to keep your family safe online.
Trading cryptocurrency and NFT is still largely unregulated. As such, parents must educate their kids about the concept of market volatility and other financial impacts.
Here are a few measures that parents can take to protect their children from the exploitative and dangerous trends in trading cryptocurrency and NFTs.
Learn about cyber security issues and how they might impact your family. Then, share this knowledge with your teen. This will ensure they are well-informed, which will therefore help them stay alert about potential harms. Additionally, they will know when and from where to get help.
Some platforms allow children under 18 years old to trade. However, parental permission is often required. As such, this serves as a great opportunity for parents to get involved and learn a little themselves.
If a child trades in cryptocurrency and NFTs, they will have to manage private keys and various passwords. As a parent, you can help them do this in a variety of ways. One way is through hardware wallets (sometimes called cold wallets) that come in USB form. These are PIN-protected devices that plug into a computer. Blockchain security experts say this is the most secure method to keep digital assets away from online hacks.
Additionally, getting directly involved in purchases can help ensure children are making safe trades in cryptocurrency and NFTs. Essentially, this will help ensure they don’t fall prey to scam assets and unreliable projects being advertised.
Another tool parents can use to support their child’s trades is the Blockchain Explorer. The Explorer records all incoming and outgoing transactions that occur on a particular blockchain network. So, parents can keep track of their child’s transactions and digital assets balance. All you need is your child’s public wallet address.
If your child has their own card with which to make purchases, ensure you set limits to their spending. In addition to managing their spending, these limits will ensure that if your child’s card details are stolen, hackers would have a cap on how much they could steal.
Another way to limit spending on trades in cryptocurrency and NFTs is through setting parental controls. Controls are available through broadband and mobile network service providers as well as web browsers.
Furthermore, many companies offering anti-virus software also incorporate parental controls to help keep children safe. Restricting certain content or websites can reduce the risk of exposure to cyber security threats.
If your child expresses interest in trading cryptocurrency and NFTs, it’s important to learn the language. Explore more about how NFTs and cryptocurrency works along with the terminology traders might use.
