HONOLULU (Island News) — Hawaii lawmakers are signaling a major shift in how cryptocurrency ATMs, often called Bitcoin kiosks, could be regulated across the state. The new bills come amid growing concerns they are being used to scam vulnerable residents, especially kupuna.
During a House committee hearing, lawmakers spent hours weighing whether the machines represent financial innovation or an open door for fraud. By the end of the hearing, one bill advanced, while others deferred, pointing to tighter rules ahead.
Prosecutors and consumer advocates testified that cryptocurrency kiosks are increasingly being used in scams, where criminals pressure victims to deposit large amounts of cash into machines under false pretenses.
Hawaii lawmakers are signaling a major shift in how cryptocurrency ATMs, often called Bitcoin kiosks, could be regulated across the state. The new bills come amid growing concerns they are being used to scam vulnerable residents, especially kupuna.
“Scammers love kiosks… and our victims, our kupuna, they’re vulnerable to them, and they lose huge amounts of money fast,” said a representative from the Prosecutor’s Office.
Officials said scammers often pose as police officers, IRS agents or even family members, creating urgency and fear to convince victims to move cash into cryptocurrency immediately, transactions that are nearly impossible to reverse.
AARP Hawaii echoed those concerns, highlighting the lasting financial damage many victims face.
“When those tens of thousands of dollars are lost, they can’t recoup it,” said AARP Hawaii State Director Kealiʻi Lopez. “When they lose their home, they can’t recoup it.”
According to AARP, Hawaii residents lost more than $920,000 in crypto ATM scams in 2024 alone, and advocates warn that number is continuing to rise.
In response, the Office of Consumer Protection and other agencies pushed lawmakers to adopt stricter regulations, including transaction limits, refund requirements and even banning cash purchases at cryptocurrency kiosks altogether.
“Ban is probably the best way to protect consumers from fraud,” said Emma Olson with the Office of Consumer Protection.
Cryptocurrency kiosk companies pushed back against the proposals, arguing the machines themselves are not the problem.
“Kiosks function as a bridge between the cash economy and the digital economy,” said Clara Wulfsen, Associate Director of Government Affairs for CoinFlip. She added that kiosks can help people who find online exchanges confusing or intimidating.
Companies also warned that banning cash transactions could hurt unbanked residents and simply shift scam activity elsewhere. CoinFlip testified that its illicit activity rate is about 1%, which it says is comparable to traditional financial institutions.
Lawmakers were ultimately unconvinced by those arguments.
The committee advanced House Bill 1642, which would ban cash purchases of cryptocurrency at ATMs, while still allowing users to cash out cryptocurrency they already own.
Several other measures, including HB 1640, HB 1647 and HB 1560, were deferred.
The legislation now continues through the lawmaking process, where additional changes and debate are expected.