Hawaii is set to ban cash to crypto transactions through cryptocurrency ATMs and kiosks from October 1, making it the fourth U.S. state to impose a complete prohibition on this type of retail crypto access. Governor Josh Green signed House Bill 1642 into law as Act 224 on July 9, with lawmakers citing growing cryptocurrency related fraud and losses among Hawaii residents.
The law specifically prohibits the ownership, operation or management of a digital financial asset transaction kiosk that accepts U.S. currency from customers in exchange for digital assets. It does not amount to a general ban on cryptocurrency trading or ownership in the state.
Key Takeaways
- Hawaii’s crypto ATM ban takes effect on October 1, 2026.
- Act 224 prohibits kiosks from accepting U.S. currency in exchange for digital assets.
- The law targets cash to crypto transactions rather than cryptocurrency activity generally.
- FBI data recorded 92 Hawaii complaints involving crypto kiosks in 2025, with adjusted losses of about $3.85 million.
- Hawaii will join Indiana, Minnesota and Tennessee in banning crypto kiosks.
- Consumers will still be able to use kiosks to convert existing cryptocurrency into cash, according to reporting on the legislation.
Hawaii Targets Crypto Kiosks Over Fraud Concerns
The legislation was driven largely by concerns that cryptocurrency kiosks are being used by criminals to receive money from victims of scams. According to the FBI’s Internet Crime Complaint Center, cryptocurrency kiosks were involved in more than 13,400 complaints across the United States in 2025, with reported losses exceeding $388 million. That represented a 58% increase in losses from 2024. More than half of the complaints involved people aged over 50, who accounted for more than $302 million in losses. Hawaii recorded 92 complaints involving cryptocurrency kiosks in 2025, with adjusted losses of approximately $3.85 million, according to the FBI’s state level data.
The typical scam involves criminals convincing victims to withdraw cash from their bank and deposit it into a crypto kiosk. The victim is then instructed to send the cryptocurrency to a wallet controlled by the scammer. The FBI has warned that criminals can use these machines to move funds quickly after persuading victims to make cash withdrawals.
What the New Law Actually Prohibits
Act 224 is narrower than a general cryptocurrency ban. Starting October 1, operators will no longer be allowed to own, operate or manage a kiosk that accepts U.S. currency from customers in exchange for digital assets. The measure therefore removes the cash to crypto purchase function that lawmakers identified as particularly vulnerable to fraud.
Hawaii lawmakers considered several approaches to regulating crypto kiosks during the 2026 legislative session. Other proposals focused on transaction limits, blockchain monitoring, customer disclosures and refunds. However, HB 1642 ultimately became the outright prohibition on cash purchases of digital assets. Hawaii News Now reported that customers will still be able to cash out cryptocurrency they already hold through kiosks, meaning the law does not eliminate every function of the machines.
Hawaii Joins Growing State Crackdown
Hawaii’s decision adds to a growing divide among U.S. states over how cryptocurrency kiosks should be regulated. Indiana, Minnesota and Tennessee have already moved toward complete bans, while other states have adopted stricter operating requirements instead. Hawaii’s approach is notable because it removes the cash purchase channel altogether rather than imposing transaction limits or additional compliance requirements on operators.
The state’s law also comes as other jurisdictions continue experimenting with alternative approaches. Some proposed legislation would require operators to use blockchain analytics, provide detailed transaction receipts, maintain customer service channels and offer refunds in certain fraud cases.
For the crypto industry, the different approaches could create a fragmented regulatory environment in which kiosk operators face substantially different requirements depending on the state where a machine is located.
What Happens After October 1
The immediate impact will fall on businesses operating cryptocurrency kiosks across Hawaii. Operators that currently accept cash for digital assets will need to stop that activity before the law takes effect.
Data cited in the supplied reports indicated that dozens of crypto ATMs and kiosks were operating across Hawaii. The FBI’s data also confirms that the state recorded millions of dollars in losses from scams involving these machines in 2025. For consumers, the change removes one of the most accessible ways to convert physical cash into cryptocurrency. Users will instead have to rely more heavily on regulated exchanges, banking channels and other digital on ramps.
Conclusion
Hawaii’s October 1 ban represents one of the strongest state responses yet to cryptocurrency kiosk fraud in the United States. The legislation does not prohibit cryptocurrency itself. Instead, it targets the cash to crypto transaction model that authorities say has increasingly been exploited by scammers.
With FBI data showing hundreds of millions of dollars in nationwide losses involving crypto kiosks, Hawaii’s decision could encourage other states to consider similar restrictions. The bigger question for the crypto industry is whether future legislation will favor outright bans or stricter safeguards that preserve retail access while addressing fraud risks.
