Hawaii is set to implement one of the most stringent state-level restrictions on cryptocurrency ATM fraud in the United States. Beginning October 1, cryptocurrency kiosks in the state will be prohibited from accepting U.S. currency in exchange for digital assets.

Governor Josh Green signed Act 224 into law on July 9. The legislation makes it unlawful for any operator to own, operate, or manage a digital financial asset transaction kiosk that accepts U.S. currency from customers in exchange for digital assets.

However, the measure stops short of a total prohibition on all crypto ATM functions. Kiosk operators may still facilitate crypto-to-crypto exchanges, as well as conversions of digital assets into U.S. currency. Only the cash-to-crypto purchase model is being targeted.

Fraud Losses Prompt Legislative Action

The new law comes in response to a sharp rise in fraud tied to cryptocurrency kiosks. Hawaii authorities recorded 92 complaints involving such machines in 2025, with adjusted losses reaching approximately $3.85 million.

Crypto kiosks have increasingly been exploited in scams involving government impersonation, fraudulent investment schemes, technical-support deception, and other forms of financial fraud. In typical cases, victims are coerced into converting cash into cryptocurrency and transferring the funds to wallets controlled by bad actors. The cash-accepting nature of these machines makes them particularly difficult to trace once funds are sent, since cryptocurrency transactions are irreversible and wallet ownership can be difficult to attribute to individuals.

At the federal level, the FBI has reported hundreds of millions of dollars in cryptocurrency kiosk-related losses across the country, intensifying pressure on state legislators to strengthen consumer protection measures. Crypto ATMs, which number in the tens of thousands across the United States, are already required to register with the Financial Crimes Enforcement Network (FinCEN) as money services businesses, but state-level oversight of consumer-facing transactions varies widely.

Hawaii's Approach Contrasts with Full State Bans

Hawaii's targeted restriction diverges from the outright bans on cryptocurrency kiosks already enacted in three other states. Indiana, Tennessee, and Minnesota have each prohibited cryptocurrency kiosks statewide.

Hawaii's more narrow approach means the state's kiosk industry may continue offering limited services beyond October 1. Operators will, however, lose access to the cash-to-crypto transaction flow that scammers have frequently exploited. The measure is notable for targeting a specific transaction type rather than the machines themselves, a model that other states weighing similar consumer-protection legislation may look to as a template.

The legislation reflects a broader regulatory trend across the United States, where lawmakers are seeking to balance consumer access to digital assets with mounting concerns over fraud. For Hawaii residents, cryptocurrency remains legal to own and trade, but purchasing digital assets with cash through a kiosk will no longer be an option once the restriction takes effect. Residents will still be able to acquire cryptocurrency through online exchanges, peer-to-peer platforms, and other regulated channels that operate outside the kiosk model.