In brief
- From October 1 it becomes an unlawful practice in Hawaii to operate a kiosk that accepts U.S. currency in exchange for a digital asset.
- Kiosks may still hand out cash for crypto, or swap one digital asset for another.
- Investigations by the attorneys general of Washington, DC and Iowa found more than 93% of transactions at the kiosks they examined were scams.
Hawaii will make it unlawful to run a crypto kiosk that takes cash from customers starting October 1, under a measure Governor Josh Green signed on July 9 as Act 224.
The law adds a section to the state's consumer protection statute making it an unlawful practice for an operator to own, operate or manage a kiosk in Hawaii that "accepts United States currency from a customer in exchange for a digital financial asset." Each prohibited transaction counts as a separate offense.
What it does not do is switch the machines off. The enacted text says "nothing in this section shall prohibit" an operator from running a kiosk that accepts a digital asset in exchange for a different digital asset, or one that accepts a digital asset in exchange for U.S. currency. Customers can still sell crypto at a kiosk and walk away with dollars; they just cannot feed banknotes in to buy it.
That distinction reflects what lawmakers were targeting, with a committee report finding the machines "increasingly being used in scams targeting older adults," in which victims are convinced to transfer cryptocurrency to a wallet address the scammer controls.
Targeting deposits
The same report cites investigations by the attorneys general of Washington, DC and Iowa which found more than 93% of transactions at the kiosks they examined were scam transactions. Since consumers have other ways into digital assets, the committee concluded, banning purchases outright was appropriate.
