Hawaii is the first state to ban cash deposits on crypto ATMs, rather than banning them outright. The state passed this law to address ongoing concerns around fraud at crypto ATMs, according to a report by Hawaii News Now.

Although the law bans cash deposits at crypto ATMs, customers can convert crypto into cash or make withdrawals at the machines. The law takes effect Oct. 1.

Hawaii Banking Commissioner Dwight Young said that crypto ATMs have been increasingly used for fraud and targets vulnerable people.

"It usually starts with some unsolicited phone call, text message or email," Young said in the report. "They'll say your bank account is compromised, or you missed jury duty and then they'll get you to withdraw cash from your bank and put it into these ATMs."

Crypto ATMs have beenbanned in several states, including Indiana, Tennessee, and Minnesota.