Teenagers are taking a punt on high-risk crypto, warns FCA

More than 250,000 children aged 13 to 16 own cryptocurrencies, the city watchdog has warned.

Financial Conduct Authority boss Nikhil Rathi sounded the alarm over increasing financial vulnerability among teenagers, with 8 per cent of 13- to 16-year-olds holding the high-risk asset.

Concerns are mounting that owning digital currencies could expose children to scams, theft and malware.

Crypto kids: FCA boss Nikhil Rathi sounded the alarm over increasing financially vulnerability among teenagers, with 8% of 13-16-year-olds holding high-risk cryptocurrencies

Rathi said a recent report on financial education ‘shone a light on how children use money at ever younger ages, and their vulnerability to online marketing’.

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

That is the equivalent of a quarter of a million teenagers, according to official population estimates.

Children are gaining access to digital money at ever younger ages, allowing them to manage it online and on smartphone apps as the use of cash plummets.

While some investors have made money from cryptocurrencies such as Bitcoin they are high-risk.

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

Some 9 per cent of adults – 5 million people – owned cryptocurrency in August 2022, according to the FCA.