New Hawaii Law Targets Crypto ATM Scams

HONOLULU – Starting October 1, a new state law will prohibit the use of cash deposits at virtual currency kiosks to prevent scams. However, those with existing accounts will still be able to convert cryptocurrencies to cash and make withdrawals.

AARP and other consumer advocacy groups highlight FBI statistics indicating that losses from crypto kiosk fraud could reach $3.85 million by 2025, significantly increasing compared to previous years.

In response, Hawaii’s Legislature has enacted a consumer protection law that specifically bans kiosks accepting cash deposits, making it the first state to do so. Meanwhile, some states have either completely banned these machines or implemented various restrictions to enhance consumer safety.

The state government is advising residents to stay alert and cautious about potential cryptocurrency scams until the law is implemented.

Hawaii Bank Commissioner Dwight Young noted that these machines are often used anonymously, which complicates tracking for authorities, thus making them attractive to criminals. “Typically, it begins with an unsolicited call or message,” he explained. “They might claim your bank account has been compromised or that you missed jury duty, directing you to withdraw cash to use at the ATM.”

Scammers frequently stay on the line with victims until the money enters the machine—at which point, it’s basically gone.

Employees near these kiosks have reported that many users appear to be anxious and distressed, particularly older individuals. “I rarely see anyone looking happy using these,” Young stated.

If you are approached to buy virtual currency by someone who claims to represent the government, it’s advisable to disengage immediately. “Take a moment to breathe and evaluate the situation,” recommends Young. “Don’t trust the contact number they provide. Instead, look up your bank’s official number and call to verify.”

He also encourages individuals not to hesitate in discussing their concerns with family. Scammers often exploit social isolation to prevent victims from seeking advice.

If you suspect you’ve been targeted by a scam, it’s important to report the incident to local police and the Department of Commerce and Consumer Affairs at 844-808-3222 or visit their website.