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Hawaii is set to become the latest state in the US to implement a full prohibition on cryptocurrency kiosks and ATMs. Governor Josh Green signed House Bill 1642 into law in July, following its passage by the state’s legislature in May. The new measure marks a significant shift in the regulation of digital assets within Hawaii.
Official move to restrict digital asset kiosks
The new law prohibits any “ownership, operation, or management of a digital financial asset transaction kiosk that accepts United States currency from a customer in exchange for a digital financial asset.” This means all crypto ATMs and kiosks operating in Hawaii must cease operations once the law comes into effect.
This legislation responds to widespread concerns about scams involving digital asset transactions in the state. The Federal Bureau of Investigation’s Internet Crime Complaint Center reported in April that Americans lost over $11 billion to fraud connected to digital assets in 2025. Residents of Hawaii submitted 826 complaints linked to crypto activities in that period, with losses totaling approximately $80 million—including funds lost at kiosks and ATMs.
Reports revealed that Hawaii residents experienced $80 million in losses tied to digital asset scams, underlining the increasing risks associated with crypto ATMs and kiosks.
CoinATMRadar data indicated that, as of Wednesday, there were 57 operational crypto ATMs spread across four of the state’s main islands. These machines facilitated direct transactions between consumers and crypto networks but also became focal points for illicit activity and fraud.
Broader context of US regulatory action
Hawaii’s move follows similar bans introduced in Minnesota, Tennessee, and Indiana. These states have begun enforcing total prohibitions on digital asset kiosks at various points this year—Minnesota in August, Tennessee in July, and Indiana in March. Elsewhere, legislatures in states such as Delaware and New Jersey have discussed banning crypto ATMs, though no measures have yet been enacted there as of August. South Dakota and Wyoming have opted for tight restrictions instead of outright bans, imposing significant regulatory hurdles for operators.
These decisions reflect ongoing deliberations among US policymakers around the risks of scams and money laundering facilitated by the automated nature of crypto ATMs.
While traditional financial infrastructure still relies on layers of intermediaries and complex brokers, a new wave of financial technology is streamlining access. Wall Street’s increasing engagement with Web3 means that investors can now use applications like 1stepSwap to directly hold shares in major US corporations, as well as gold and silver, within their crypto wallets. By turning Real-World Assets (RWAs) into tokens and automatically finding optimal pricing in seconds, services like this are eliminating the need for conventional middlemen.
The heightened regulatory scrutiny of crypto ATMs in the US suggests a growing focus on investor protection and oversight. Advocates of digital asset innovation continue to call for clearer frameworks rather than prohibitions, but recent losses have prompted stricter approaches at the state level.
The latest legislative efforts are designed to prevent further consumer losses in digital asset transactions and to address gaps in oversight that had left some users vulnerable to fraud.
State regulators in Hawaii have not specified whether existing ATM operators will receive a grace period or transition process, or whether all 57 of the state’s current crypto kiosks will need to be removed immediately once the law is enforced.
It remains to be seen whether additional states will follow Hawaii’s example, but growing concern over financial crimes related to crypto ATMs is prompting an ongoing wave of regulatory response across the country.