Can You Do Crypto Under 18? What You Need to Know

Cryptocurrency has sparked interest across various age groups, including those under 18. Engaging in digital currency activities involves specific legal considerations tied to age. Understanding these legal aspects is important for anyone considering involvement in the crypto space, particularly for minors.

Minors and Financial Contracts

In the United States, individuals are considered minors until they reach the age of majority, which is 18 in most states. This status impacts a minor’s ability to enter binding agreements. Contract law requires parties to possess “legal capacity” to form an enforceable contract.

Minors are presumed to lack this legal capacity due to their immature judgment. Most contracts entered into by a minor are “voidable” at the minor’s discretion. This means the minor can either uphold or legally cancel the contract, even if they initially agreed to its terms.

This protection shields younger individuals from unfavorable agreements. Once a minor reaches the age of majority, they can ratify the contract, making it fully binding. If they do not disaffirm within a reasonable time, the contract may be considered ratified.

Age Restrictions on Cryptocurrency Platforms

The legal principles governing minors and contracts directly influence age restrictions on cryptocurrency platforms. Most reputable crypto exchanges require users to be at least 18 to create an account and trade. This ensures users have the legal capacity to agree to the platform’s terms of service.

Age restrictions are also driven by regulatory compliance, including Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations. KYC processes require crypto exchanges to verify user identity to prevent illicit activities like fraud and money laundering. Verification involves submitting government-issued identification, such as a driver’s license or passport, and often proof of address, which confirms identity and age.

Some platforms may request selfies or video verification. These identity checks ensure users are of legal age and are legitimate. While some decentralized exchanges (DEXs) may not enforce strict age verification, they often come with increased risks and fewer consumer protections.

Pathways for Underage Participation

Individuals under 18 can still engage with cryptocurrency through compliant and supervised methods. One common pathway involves a parent or legal guardian opening an account in their own name. This adult-controlled account allows the minor to learn about cryptocurrency, observe market dynamics, and participate under close supervision. The adult maintains legal ownership and responsibility for the account, ensuring all activities adhere to platform terms and legal requirements.

Another method involves using custodial accounts, such as those established under the Uniform Gifts to Minors Act (UGMA) or the Uniform Transfers to Minors Act (UTMA). These accounts are opened by an adult custodian for the benefit of a minor, with the assets legally belonging to the minor. While UGMA accounts are generally limited to cash and securities, UTMA accounts often allow for a broader range of assets, which may include digital assets or investments that track cryptocurrency performance, such as crypto exchange-traded funds (ETFs).

The adult custodian manages the assets until the minor reaches the age of majority, which can be 18 or 21 depending on the state and the specific account type. At that point, control of the assets transfers directly to the now-adult beneficiary. These custodial arrangements provide a structured way for minors to gradually gain exposure to digital assets under adult guidance, fostering financial literacy while navigating legal age limitations.