Hawaii Governor Josh Green recently signed House Bill 1642 or Act 224 on July 9, 2026. The new rule, which will take effect on October 1, 2026, bans the ownership, operation, and management of crypto ATM machines that accept US dollar cash deposits to be exchanged for digital assets.
However, this rule does not mean a complete shutdown of physical crypto services. A crypto.news report highlighted that the ban only targets the cash deposit function. Data from CoinATMRadar as of August 12, 2026, shows that there are currently 57 crypto machines fully operating across Hawaii’s four main islands. These machines remain legally allowed to operate as long as their services are limited to exchanging crypto for other crypto assets, or liquidating crypto balances into cash.
With this enactment, Hawaii officially becomes the fourth US state to disable the cash deposit feature at crypto ATMs this year. This step follows Minnesota, which implemented a similar ban on August 1, Tennessee on July 1, and Indiana, which had previously implemented it in March 2026.
Imposter Officials Draining Savings
This shutdown of the cash route is a direct response from the government to the high rate of cybercrime using physical ATMs as instant money laundering machines. The modus operandi is recurring but continues to claim victims. Scammer syndicates typically call victims pretending to be government officials, law enforcement, bank employees, or technical support staff. They then scare and direct the victims to immediately withdraw cash, take it to the nearest crypto ATM, and scan a QR code provided by the scammers. In just seconds, the cash bills are converted into crypto assets and sent to overseas digital wallets, leaving no way to retrieve them.
The massive impact of these scams is clearly recorded in FBI data. Throughout 2025, the Federal Bureau of Investigation recorded 13,460 complaints related to crypto kiosk crimes nationwide. The total losses of victims reached $388.98 million, marking a 23% increase in reports and a 58% surge in losses compared to the previous year.
The hardest-hitting fact is seen in the demographics of the victims. More than half of the crypto ATM scam victims last year were in the over-50 age group. They were forced to watch their retirement funds and savings vanish, with total losses reaching $302 million. In Hawaii alone, the FBI received 826 crypto scam complaints from residents in 2025, totaling about $80 million in losses. From that dataset, 92 specific cases occurred through crypto kiosks, costing Hawaii residents $3.85 million.
Two Different Paths to Confronting Risks
The rising losses have forced governments in various states to look for remedies. Delaware and New Jersey are currently drafting bills aligned with Hawaii’s initiative, targeting the complete shutdown of cash deposit functions at kiosk machines.
On the other hand, not all jurisdictions agree on the blocking option. South Dakota and Wyoming are taking a different approach. Instead of banning machines from accepting cash from customers, they prefer to establish extra-strict operational rules for crypto ATM operators to curb money laundering.
The presence of physical crypto ATM units in retail stores was originally intended to make it easier for everyday people to acquire their first digital assets. However, as the convenience of cash deposits turned into a primary weapon for scammers to drain retirees’ savings, regulators seem to have run out of patience and chosen to shut the door completely.
Reported by crypto.news.
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
