Hawaii will ban cash transactions at crypto ATMs starting October 1 to combat scams, allowing only cash withdrawals and digital exchanges.
Summary
- Starting October 1, Hawaii will make it illegal for crypto kiosks to accept cash for digital assets.
- Kiosks can still dispense cash for crypto sales or facilitate exchanges between digital assets.
- Investigations revealed that over 93% of transactions at these kiosks were scams.
Effective October 1, Hawaii will enforce a new law prohibiting the operation of crypto kiosks that accept cash payments for digital assets. This follows the signing of Act 224 by Governor Josh Green on July 9, which modifies the state's consumer protection laws.
The law makes it illegal for operators to accept U.S. currency in exchange for digital financial assets, treating each violation as a separate offense. However, existing kiosks are not required to shut down; they can still allow users to sell cryptocurrency for cash or facilitate exchanges between digital currencies.
This legislative action aims to combat the rising issue of scams, particularly those targeting vulnerable populations like the elderly. A report indicated that many kiosk transactions have been exploited in scams, where victims are tricked into transferring cryptocurrency to fraudsters' wallets.
Focus on Cash Deposits
The report also cited investigations by the attorneys general of Iowa and Washington, D.C., which found that more than 93% of transactions at these kiosks were fraudulent. Given the availability of other methods to acquire digital assets, the committee deemed it necessary to impose a ban on cash purchases.
In 2025, the FBI's Internet Crime Complaint Center recorded 92 complaints from Hawaii residents regarding kiosks, resulting in adjusted losses of $3.85 million—nearly four times the previous year's figures. Overall, Hawaii saw 826 cryptocurrency-related complaints totaling around $80 million. Hawaii's banking commissioner, Dwight Young, noted that the anonymity of these machines makes them appealing to criminals, often leading to scams initiated through unsolicited messages claiming issues with bank accounts or jury summonses.
Witnesses near the kiosks reported that many users appear to be elderly individuals, often looking distressed or anxious while using the machines.
Currently, there are approximately 57 crypto ATMs across four Hawaiian islands, according to CoinATMRadar. Other states are considering similar legislation; Texas lawmakers are contemplating a ban following significant losses to kiosk scams, while Delaware has already introduced related legislation.
