Hawaii will limit one of the core functions of encryption ATM from 1 October: users can no longer purchase digital assets by putting cash in United States dollars. According to Act 224, signed by Governor Josh Green, which entered into force on 9 July, such transactions will be considered illegal and incorporated into state consumer protection legislation.
The law only forbids cash to buy money.
The new rule does not require all encrypted ATMs to be closed. The Act addresses the pattern of transactions “to receive United States currency and to provide digital financial assets to customers”. In other words, the operator will not be able to provide cash-purchase services in Hawaii in the future.
However, the machine could retain two other functions: the sale of digital assets by users and the withdrawal of cash in United States dollars, and the exchange of one digital asset for another. In other words, the focus is on cash inflows for money, rather than on the total elimination of equipment.
The state council has focused on fraud.
In their reports, the relevant committees of the State Council indicated that such equipment was increasingly being used for fraud against older persons. It is common practice to induce victims to transfer encrypted assets to the wallet address controlled by the fraudster.
The report also refers to investigations by the Attorney-General of Washington, D.C., and Iowa that more than 93 per cent of the equipment transactions they sampled were related to fraud. On the basis of this judgement, legislators consider that a direct ban on the purchase of currency through such equipment is appropriate in cases where consumers still have other access to digital assets.
There was a marked rise in complaints and losses
Data from the United States Federal Bureau of Investigation ' s Cyber Crime Complaints Centre show that 92 complaints related to encryption ATM were filed by Hawaiian residents in 2025, resulting in an adjusted loss of approximately $3.85 million, up from four times the previous year.
- The number of encrypted complaints throughout the year in Hawaii was 826.
- Total losses involved approximately $8.0 million
- There are approximately 57 units operating on four islands across the state.
The Commissioner of the Bank of Hawaii, Dwight Young, indicated to the local media that such machines were easy to use by criminals because they were more anonymous and difficult to trace. Fraud usually starts with telephone calls, text messages or e-mails, using the terms “account anomalies” or “missing a jury summons” to direct the transfer to the victim.
Other states are pushing for restrictions.
According to the state consumer service, the staff in the vicinity of the equipment reflect that many of the users are elderly people who are nervous. Similar restrictions do not exist only in Hawaii, and Texas parliamentarians are assessing the ban, and Delaware has also advanced its own bill.