Legislature passes measure to combat fraud, cryptocurrency scams

The Hawaiʻi State Legislature has passed House Bill 1642 CD1, marking a significant step forward in protecting local residents from financial fraud schemes that are becoming increasingly tied to cryptocurrency kiosks and digital asset scams.

The measure establishes new regulations for digital financial asset transaction kiosks, commonly known as cryptocurrency ATMs. Importantly, the legislation prohibits consumers from using cash to purchase cryptocurrency at these machines, while still allowing consumers to cash out cryptocurrency they already own at such kiosks.

“The measure strengthens consumer safeguards and provides additional protections for vulnerable populations, particularly kūpuna who are often targeted by sophisticated scammers and coerced to deposit large sums of money into these kiosks,” said Rep. Scot Z. Matayoshi, Chair of the House of Consumer Protection & Commerce Committee and introducer of HB1642.

The legislation addresses a growing trend in cryptocurrency-related fraud. Nationally, cryptocurrency scams have caused approximately $240 million in fraudulent losses in the first six months of 2025 alone, according to Matayoshi.

“Scammers often pose as law enforcement or courthouse officials over the phone to feign a sense of urgency,” Matayoshi added. “Once the cash is converted to cryptocurrency, the scammers will often use the cryptocurrency to launder money, which takes local money out of our state’s economy. This indicates the urgent and significant threat to the financial safety of the residents of this State.”

The bill reflects Hawaiʻi’s broader commitment to strengthening consumer protection and public safety in an evolving digital economy. By regulating this technology, HB1642 will protect residents from increasingly sophisticated scams. As financial fraud continues to evolve, HB1642 sends a clear message that Hawaiʻi is taking proactive steps to protect consumers, safeguard seniors, and strengthen public confidence in emerging financial technologies.