More than 250,000 young people aged 13 to 16 own risky cryptocurrencies, city watchdog warns

More than 250,000 children aged between 13 and 16 own cryptocurrencies, the city’s watchdog has warned.

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

There are growing concerns that owning digital currencies could expose children to scams, theft and malware.

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

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

This equates to a quarter of a million adolescents, according to official population estimates.

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

While some investors have made money with cryptocurrencies like Bitcoin, they come with a high level of risk.

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

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