Hawaii to ban crypto ATMs amid $80M fraud losses
Hawaii will outlaw crypto ATMs next month, adding to a growing state-level regulatory crackdown that is shrinking the physical footprint of digital asset infrastructure in the US.
Hawaii will prohibit the operation of cryptocurrency ATMs and kiosks starting October 1. Governor Josh Green signed House Bill 1642 into law in July, following the state legislature's passage of the measure in May. The legislation explicitly outlaws the ownership, operation, or management of any kiosk that accepts US currency from a customer in exchange for a digital financial asset.
The ban represents a direct regulatory response to escalating financial fraud within the digital asset sector. According to April data from the FBI’s Internet Crime Complaint Center, Americans lost more than $11 billion to digital asset scams in 2025 alone. Within that national figure, Hawaii residents filed 826 related complaints last year, suffering approximately $80 million in total losses tied to digital assets, including those facilitated through physical ATMs and kiosks.
Hawaii is now the fourth US state to implement a total prohibition on these machines, reflecting a hardening regulatory stance against physical crypto infrastructure. Minnesota, Tennessee, and Indiana enacted similar bans in August, July, and March, respectively. For market operators, this accelerating timeline of state-level prohibitions represents a significant contraction of viable operating territory within the US market.
The immediate operational impact will be the removal of existing infrastructure. Data from CoinATMRadar indicates that 57 crypto ATMs and kiosks are currently operating across four of Hawaii’s main islands. These machines will require decommissioning ahead of the October deadline, effectively eliminating a local revenue stream for operators and reducing the national footprint of physical crypto access points.
The regulatory environment for these machines continues to tighten beyond the four states with total bans. Lawmakers in Delaware and New Jersey have proposed similar prohibitions that have not yet been signed into law as of August. In states that have stopped short of outright bans, strict guardrails are being imposed, as seen in South Dakota and Wyoming.
For investors and executives in the digital asset space, Hawaii's law underscores a growing trend: state-level consumer protection frameworks are actively dismantling the physical crypto ATM business model. As fraud losses mount, the political calculus is shifting away from accommodating physical digital asset exchanges, forcing the industry to navigate an increasingly fragmented and hostile regulatory landscape across the US.
