Starting October 1, Hawaii will prohibit the use of physical cash to purchase digital assets at cryptocurrency kiosks. The move follows a surge in fraud, with the FBI documenting 92 complaints and $3.85 million in losses among state residents in 2025 as scammers increasingly weaponized these machines to drain victim accounts.
Governor Josh Green signed House Bill 1642 into law as Act 224, targeting the specific mechanism used by criminals to facilitate illicit transfers. Under the new rules, operators must disable the ability for machines to accept U.S. currency in exchange for digital assets. The law does not mandate a total shutdown of the hardware; kiosks may continue to process crypto-to-cash withdrawals or direct crypto-to-crypto exchanges, provided no cash enters the system to purchase new tokens.
Legislators identified these machines as primary tools for impersonation schemes, where scammers pose as government agents or bank officials to coerce victims into depositing cash at local kiosks. Once the currency is converted, assets are often funneled through offshore platforms, making recovery nearly impossible. Each prohibited transaction conducted after the October deadline will be treated as a separate violation under Hawaii’s consumer protection statutes.
This regulatory shift positions Hawaii alongside states like Indiana, Tennessee, and Minnesota, which have also moved to restrict or ban kiosk operations to curb financial exploitation. While federal oversight requires kiosk operators to register as money services businesses, state-level authorities are increasingly bypassing federal standards to implement localized prohibitions. As of August 12, there were 57 such devices operating across four islands, all of which must now be reconfigured or face legal consequences.
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