How can this rooting be removed from this device?
Search "<phone-model-name> unroot"
Or, if it is rooted using Magisk, see if there is an app called Magisk, there might be unrooting option available on the application.
If the phone is flashed and everything is wiped out, will the device be safe again?
First, rooting a phone doesn't make it will automatically make the device become insecure. And if it flashed using the official stock ROM, the device would be just like the default again.
What amount of damage can a rooted device cause him?
If your friend rooting it using a popular and legitimate method, there's unlikely to cause damage. If the phone is infiltrated by malware, it increases the chances or effects to cause damage.
Generally, using a mobile phone to keep a cryptocurrency wallet is not recommendable due to how it works and its usage. It has a greater risk compared to the other ways of using a wallet.