Laws may need to be bolstered to crack down on exploitation of child ‘influencers’, senior MP suggests
Laws may need to be strengthened to crack down on the exploitation of child “influencers”, a senior Labour MP has warned.
Chi Onwurah, chair of the science, technology and innovation committee, said parts of the Online Safety Act – passed in October 2023 – may already be “obsolete or inadequate”.
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Experts have raised concerns that there is a lack of provision in industry laws for children who earn money through brand collaborations on social media when compared to child actors and models.
This has led to some children advertising in their underwear on social media, one expert has claimed.
Those working in more traditional entertainment fields are safeguarded by performance laws, which strictly govern the hours a minor can work, the money they earn and who they are accompanied by.
The Child Influencer Project, which has curated the world’s first industry guidelines for the group, has warned of a “large gap in UK law” which is not sufficiently filled by new online safety legislation.
Official portrait of Chi Onwurah.
Pic: UK Parlimeant
The group’s research found that child influencers could be exposed to as many as 20 different risks of harm, including to dignity, identity, family life, education, and their health and safety.
Ms Onwurah told Sky News there needs to be a “much clearer understanding of the nature of child influencers ‘work’ and the legal and regulatory framework around it”.
She said: “The safety and welfare of children are at the heart of the Online Safety Act and rightly so.
“However, as we know in a number of areas the act may already be obsolete or inadequate due to the lack of foresight and rigour of the last government.”
Victoria Collins, the Liberal Democrat spokesperson for science, innovation and technology, agreed that regulations “need to keep pace with the times”, with child influencers on social media “protected in the same way” as child actors or models.
“Liberal Democrats would welcome steps to strengthen the Online Safety Act on this front,” she added.
‘Something has to be done’
MPs warned in 2022 that the government should “urgently address the gap in UK child labour and performance regulation that is leaving child influencers without protection”.
They asked for new laws on working hours and conditions, a mandate for the protection of the child’s earnings, a right to erasure and to bring child labour arrangements under the oversight of local authorities.
However, Dr Francis Rees, the principal investigator for the Child Influencer Project, told Sky News that even after the implementation of the Online Safety Act, “there’s still a lot wanting”.
“Something has to be done to make brands more aware of their own duty of care towards kids in this arena,” she said.
Dr Rees added that achieving performances from children on social media “can involve extremely coercive and disruptive practices”.
“We simply have to do more to protect these children who have very little say or understanding of what is really happening. Most are left without a voice and without a choice.”
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The researcher pointed to one particular instance, in which children were advertising an underwear brand on social media.
She said: “The kids in the company’s own marketing material or their own media campaigns are either pulling up the band of the underwear underneath their clothing, or they’re holding the underwear up while they’re fully clothed.
“But whenever you look at any of the sponsored content produced by families with children – mum, dad, and child are in their underwear.”
Dr Rees said it is “night and day” in terms of how companies are behaving when they have responsibility for the material, versus “the lack of responsibility once they hand it over to parents with kids”.
Oregon Attorney General Dan Rayfield’s lawsuit against Coinbase argues that XRP and other digital assets are unregistered securities.
Rayield sued US-based, publicly traded crypto exchange Coinbase for allegedly violating Oregon’s securities law. In an April 18 announcement, the Oregon Department of Justice said the suit was part of an effort to fill what it described as a regulatory vacuum left by federal agencies under the Trump administration:
“States must fill enforcement vacuum being left by federal regulators who are abandoning these cases under Trump administration,“ the department said.
Coinbase chief legal officer Paul Grewal voiced his frustration over the lawsuit in an April 21 X post. Justin Slaughter, the vice president of regulatory affairs at crypto investment firm Paradigm, pointed out that the lawsuit claims a long list of digital assets, including XRP (XRP), are unregistered securities.
Yarden Noy, partner at crypto legal firm DLT Law, told Cointelegraph that if the court ruled these assets are securities, it “would mostly create more confusion in this regard.” It would not be a binding precedent in other cases, not even within Oregon, he added.
Still, Noy explained that the court decision could be used by regulators and potential plaintiffs to build and make their cases. He said:
“Just like the decision in the Ripple case […] which the complaint seems to be ignoring entirely, did not make all tokens immediately listable on US platforms, I don’t expect the opposite to happen here.”
Related: Court grants 60-day pause of SEC, Ripple appeals case
A long list of crypto assets
Paradigm’s vice president of regulatory affairs Justin Slaughter called the action a “kitchen sink lawsuit.” The list of tokens cited includes high-profile altcoins such as Aave (AAVE), Avalanche (AVAX), Uniswap (UNI) and Near Protocol (NEAR), as well as the wrapped version of Terra’s collapsed token, wLUNA — but not LUNA itself.
The complaint does not explain why certain wrapped assets were included while others were excluded. It states:
“Coinbase—through the Coinbase Platform and Prime—has made available for trading in Oregon crypto assets that are offered and sold as investment contracts, and thus as securities. This includes, but is not limited to, the units of each of the crypto securities further described below.“
Related: Circle, BitGo about to apply for bank charters, others may follow: WSJ
XRP in the legal crosshairs once again
Ripple Labs, the firm behind XRP, has already faced a years-long legal battle with the US Securities and Exchange Commission. Ripple was hit with a lawsuit by the SEC in late 2020, calling XRP a “$1.3 billion unregistered securities offering.”
The same lawsuit was dropped by the SEC in late March, but it provided little legal certainty for the crypto industry. Oregon’s complaint comes amid growing concern among state officials that federal regulators are pulling back from crypto enforcement. The suit appears to be part of a broader trend of state-level authorities stepping in.
Before Oregon’s action, XRP’s legal standing was being viewed as increasingly clear. Coinbase — a crypto exchange known for its relatively cautious stance on regulatory matters — added XRP futures to its derivatives trading platform on April 21.
Magazine: XRP win leaves Ripple and industry with no crypto legal precedent set
US-based publicly traded crypto exchange Coinbase confirmed that it is considering applying for a US federal bank charter.
In a statement sent to Cointelegraph, Coinbase said it is considering pursuing a US federal bank charter, according to a company spokesperson.
“This is something Coinbase is actively considering but has not made any formal decisions yet,” the spokesperson told Cointelegraph.
The comments follow recent reports suggesting that Coinbase and multiple other major crypto firms were planning to apply for US banking licenses. Coinbase, stablecoin issuers Circle and Paxos, and crypto custodian BitGo were the other firms mentioned.
Coinbase did not clarify to Cointelegraph why it is considering pursuing a bank charter. Still, a license could potentially allow crypto firms to operate like traditional lenders, taking deposits and making loans. Cointelegraph also reached out to the other firms reportedly considering applying for a charter.
Still, firms that obtain banking charters are subject to stricter reporting and regulatory oversight. One example is Anchorage Digital, a crypto firm holding a federal bank charter.
Despite the firm obtaining the license, recent reports indicate that the US Department of Homeland Security’s El Dorado Task Force has launched an investigation into Anchorage Digital Bank.
Related: Crypto companies seeking bank charters under Trump admin — Report
Many crypto firms are likely to apply
The reports also follow the US Office of the Comptroller of the Currency granting a preliminary conditional approval for a US bank charter to Paxos back in 2021. Firms may now be considering applying as US regulators take a softer stance on crypto regulation and integrating stablecoins in the broader financial system.
The change in stance is visible at multiple levels of the US federal government. Federal Reserve Chair Jerome Powell recently said that as digital assets gain mainstream adoption, establishing a legal framework for stablecoins is a “good idea.” He also recognized that the crypto space delivered a consumer use case that “could have wide appeal.”
Related: ECB flags risk of financial contagion from US crypto push
Evolving US stablecoin regulation
The US House Financial Services Committee passed a Republican-backed stablecoin framework bill earlier in April — the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act.
Another bill that is moving through the US legislative process is the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. The STABLE and GENIUS bills differ in how they regulate the stablecoin industry in their current form.
The GENIUS Act was introduced first and passed the US Senate Banking Committee in mid-March. The STABLE Act, on the other hand, emphasizes federal oversight, while the GENIUS Act seeks a more flexible path that considers both state and federal regulations.
The STABLE Act would enforce a two-year moratorium on issuing collateralized stablecoins that are backed by self-issued digital assets. The bill would also require that stablecoin reserves be held separate from business funds.
The GENIUS Act would establish a legal framework for stablecoin payments and leverage US-based stablecoin issuers in an attempt to reinforce the dollar’s global dominance. The bill would also enhance Anti-Money Laundering (AML) safeguards, reserve and liquidity standards and sanctions checks. It classifies stablecoin issuers as financial institutions.
Magazine: Coinbase and Base: Is crypto just becoming traditional finance 2.0?
The European Central Bank (ECB) raised an alarm over potential fallout from aggressive US support for the crypto industry, warning that a surge in dollar-backed stablecoins could destabilize Europe’s financial system.
According to a policy paper seen by Politico, the ECB has asked for a revision of the Markets in Crypto-Assets Regulation (MiCA) regulatory framework for cryptocurrencies just months after it came into effect.
The concern is that US reforms backed by President Donald Trump could flood European markets with dollar-denominated stablecoins.
The ECB fears this could trigger a flight of European capital into US assets, undermining EU financial sovereignty and exposing banks to liquidity risks.
ECB and European Commission clash over MiCA rules
While the ECB calls for tighter controls, the European Commission dismissed the warnings as exaggerated, per the report.
The report, citing two diplomats and one EU official, said that the existing MiCA framework is robust enough to manage stablecoin risks despite potential US policies like the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) and the Guiding and Establishing National Innovation for US Stablecoins (GENIUS), two bills aimed at expanding America’s crypto footprint.
“The Commission was quite clear that they had different views on this topic,” and “not very many (countries) supported the idea that we should now jump the gun and start making quick changes in (the rules) based on this alone,” one of the diplomats reportedly told Politico.
The stablecoin sector now commands a valuation of $234 billion, according to data from CoinMarketCap.
The ECB warned that European issuers could face redemption pressures from EU and foreign holders without stricter limits, potentially sparking a financial “run” and harming exposed institutions.
“The worry is warranted,” Mikko Ohtamaa, co-founder and CEO at Trading Strategy, said in a post on X. “However, the EU had the first mover advantage with the regulation and they screwed it up.”
Ohtamaa said no EU stablecoin is globally competitive due to MiCA’s restrictive rules, which are influenced by bank and legacy finance lobbying.
Related: US regulator,s FDIC and CFTC, ease crypto restrictions for banks, derivatives
Tether remains a major critic of MiCA
Tether, the issuer of the world’s largest stablecoin, USDt (USDT), has long been a critic of the EU’s MiCA regulation.
Last year, Tether CEO Paolo Ardoino argued that MiCA’s requirements, particularly the mandate for stablecoin issuers to hold at least 60% of reserves in EU bank accounts, could introduce systemic risks to both stablecoins and the broader banking system.
Due to noncompliance with MiCA, USDT has faced delistings from major European exchanges, including Coinbase, Crypto.com and Kraken.
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