Hawaii To Ban Cash Deposits at Crypto ATMs From October

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.