Hawaii to Prohibit Cash Deposits at Crypto ATMs Starting October 1

Beginning October 1, Hawaii will prohibit cash transactions for cryptocurrency at kiosks due to 92 complaints and $3.85 million in reported losses submitted to the FBI by residents in 2025.

House Bill 1642, which Governor Josh Green signed into Act 224 on July 9, prohibits operators from running kiosks that accept cash for digital assets.

This ban will commence on October 1, and each breach will be treated as an individual offense under the state’s consumer protection laws. Lawmakers completed the bill on May 6 before sending it to Green.

While some sources indicate an all-encompassing ban on crypto ATMs, the law specifically concerns cash deposits for digital assets and does not apply to all services these machines offer. Operators can still run kiosks that facilitate exchanges of crypto for other digital currencies or U.S. dollars.

Consequently, Hawaii residents will be unable to buy Bitcoin or other cryptocurrencies with cash at kiosks; however, they can still sell their cryptocurrency for cash at available machines. Additionally, the law does not impede the buying, selling, or holding of digital assets on online platforms that are still operational in the state.

Focus on cash transactions in Hawaii crypto ATM legislation

Per Act 224, a digital financial asset transaction kiosk is defined as an electronic device that accepts or dispenses U.S. currency, whether through cash or card payments, in exchange for digital assets. This definition excludes certain merchant rewards, assets meant solely for use within online games, and securities registered or exempt from registration under federal or Hawaiian securities law.

Lawmakers have highlighted the cash deposit feature due to rampant scams where victims are deceived into withdrawing cash to deposit at kiosks. Legislative findings indicate that fraudsters generally impersonate officials, bank staff, technical support, or company agents to guide victims in completing payments.

While at a kiosk, the scammer may stay on the line, give a wallet address or QR code, and assist the victim in bypassing warnings from the operator, as noted in the findings. Following the transaction, criminals often transfer digital assets through various wallets or offshore platforms, which makes it less likely for victims to recover their funds.

The legislature cited investigations by attorneys general from Iowa and the District of Columbia, showing that a significant number of transactions at some operators were fraudulent. They estimated this rate could reach as high as 90%, although it does not represent every kiosk or transaction throughout the nation.

As of August 12, data from CoinATMRadar noted that Hawaii had 57 cryptocurrency ATMs and kiosks across its four main islands. Operators must disable the affected cash deposit functionality or stop operations that accept cash for crypto by the October deadline.

FBI data sheds light on kiosk-related losses in Hawaii

In May, the FBI’s Internet Crime Complaint Center reported that Hawaii residents filed 92 complaints about cryptocurrency kiosks in 2025, leading to around $3.85 million in adjusted losses.

Nationally, IC3 documented 13,460 complaints linked to kiosks in the same period, totaling approximately $388.98 million in adjusted losses. Complaint numbers increased by 23% compared to 2024, while reported losses grew by 58%.

More than half of the complaints in 2025 came from individuals aged 50 and older, whose reported losses exceeded $302 million, illustrating the susceptibility of older residents to scams involving urgent payments and impersonation tactics.

IC3 warns that state complaint totals reflect cases where a cryptocurrency kiosk was implicated, meaning complaints could also involve bank transfers, payment apps, or other methods. Thus, the total loss mentioned in a complaint may not solely relate to the kiosk.

The FBI’s 2025 annual report revealed 826 cryptocurrency-related complaints from Hawaii, resulting in approximately $80 million in losses. Unlike kiosk-specific figures, this state data includes various types of crypto-related crimes and should not be seen solely as ATM fraud.

The bureau encourages U.S. consumers to avoid sending cryptocurrency to individuals known only via phone or online messaging and to refrain from scanning QR codes provided by strangers, or transferring funds to those claiming to represent government entities, banks, or companies without verifying the legitimacy of their claims.

State regulations on crypto ATMs present a mixture of bans and restrictions

Hawaii has opted for a more targeted transaction ban than states like Indiana, Tennessee, and Minnesota, where laws outright ban crypto kiosk operations rather than limiting just cash-to-crypto deposits.

Minnesota’s statewide ban went into effect on August 1 after state officials recorded 134 complaints and nearly $1 million in losses over three years. Existing machines were ordered to stop processing transactions, and operators have until December 31 to remove kiosks accessible to the public.

Tennessee’s prohibition took effect on July 1, while Georgia enacted a different approach on the same day by permitting kiosks under certain transaction limits and establishing customer warning and fraud victim refund requirements, as reported earlier.

The ban in Indiana began in March. Similarly, lawmakers in Delaware and New Jersey have proposed measures to prohibit crypto ATMs, though as of August, neither proposal had been enacted into law.

Other states permit the machines but require licensing, warning screens, receipts, holding periods, daily limits, or refunds in specific fraud cases. A review by crypto.news published on August 3 revealed a wide range of oversight concerning crypto kiosks in the U.S., from complete bans to states lacking specific regulations.

At the federal level, crypto kiosk operators that qualify as money services businesses must register with the Financial Crimes Enforcement Network and comply with the Bank Secrecy Act’s requirements, which include establishing an anti-money laundering program, keeping transaction records, filing suspicious activity reports, and enforcing sanctions controls. However, federal registration does not hinder states from imposing stricter operational rules.

Each prohibited transaction triggers enforcement actions

Hawaii incorporates the new law into Chapter 481B of its Revised Statutes, which addresses unfair and deceptive business practices. It designates every cash-to-crypto transaction carried out in violation of the ban as a separate offense, rather than treating ongoing operations as a single violation.

The finalized bill removes the requirement for a total shutdown if a machine can still offer compliant services. Operators may retain functionality for crypto-to-cash withdrawals and exchanges among digital assets, provided they do not accept U.S. currency for crypto transactions after October 1.