Hawaii has enacted legislation prohibiting cash-to-crypto transactions at digital asset kiosks across the state, with enforcement set to begin on October 1, 2026. Signed into law by Governor Josh Green on July 9 as Act 224, the legislation restricts operators from managing or owning kiosks that accept US fiat currency in exchange for digital assets. Each prohibited cash deposit conducted after the deadline will be treated as an individual offense under Hawaii’s unfair and deceptive business practices statutes.
The law targets the cash deposit function specifically, rather than imposing a total operational ban on physical kiosks. Machines located across Hawaii’s islands may continue offering crypto-to-cash withdrawals and digital asset conversions, provided they do not accept physical currency to purchase cryptocurrencies. As of August 12, Hawaii hosted 57 registered cryptocurrency kiosks across four main islands, requiring operators to disable cash deposit hardware or modify system software prior to the October deadline.
Rising Fraud Metrics Drive Legislative Action
State lawmakers focused on restricting cash deposits following evidence that bad actors routinely instruct victims to deposit physical banknotes into physical kiosks. Scammers frequently impersonate government officials, banking staff, or technical support representatives, guiding victims through transaction steps over the phone and supplying external wallet addresses or QR codes to intercept funds.
Data published by the FBI’s Internet Crime Complaint Center (IC3) indicated that Hawaii residents filed 92 kiosk-related fraud complaints in 2025, resulting in approximately $3.85 million in adjusted losses. Nationally, the IC3 received 13,460 kiosk complaints totaling $388.98 million in losses during the same period, representing a 58% increase in reported financial damages compared to 2024. Older adults were disproportionately impacted, with individuals over the age of 50 accounting for more than $302 million of national losses.
Regulatory Approaches Divide US States
Hawaii’s targeted deposit ban reflects a distinct regulatory path compared to other US jurisdictions addressing kiosk-related financial crime. States such as Indiana, Tennessee, and Minnesota have enacted total bans on crypto ATM operations, with Minnesota requiring operators to remove all physical machines by the end of 2026. Conversely, states like Georgia have maintained kiosk operations by implementing transaction caps, mandatory warning screens, and conditional refund duties for fraud victims.
While federal framework requirements mandate that kiosk operators register as Money Services Businesses with the Financial Crimes Enforcement Network (FinCEN) and maintain anti-money laundering controls, individual states retain the authority to enforce stricter operating restrictions. Hawaii’s revised framework allows compliant operators to maintain two-way machine functionality for crypto sales, provided all cash deposit rails are permanently disabled.
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