HB 1642

HOUSE OF REPRESENTATIVES
H.B. NO.
1642
THIRTY-THIRD LEGISLATURE, 2026
H.D. 1
STATE OF HAWAII
S.D. 1
C.D. 1
A BILL FOR AN ACT
RELATING TO CONSUMER PROTECTION.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
���� SECTION 1.� The legislature finds that digital financial
asset transaction kiosks pose a significant risk to the financial security of
the residents of the State.� Digital
financial asset transaction kiosks - also known as cryptocurrency Automated
Teller Machines or cryptoATMs � enable a customer to buy and sell digital
financial assets from a wallet or exchange.�
After providing the digital financial asset transaction kiosk with
identification, which can range from a phone number to a scan of a government-issued
identification, the customer enters the address of the wallet that will receive
the purchased digital financial asset.�
The address could be the customer's own wallet or that of a third party.� Finally, the customer inserts cash or a debit
or credit card into the machine to finalize the purchase of the digital
financial asset.
���� The
legislature further finds that due to their ease of use, digital financial
asset transaction kiosks are increasingly being used to facilitate scam
payments.� Typically, criminals target
older individuals through unsolicited calls, posing as the government, a bank,
information technology support, or the customer service representative of a
company.� Once contact is made, the
scammer provides detailed instructions to the prospective victim, including how
to withdraw cash from the victim's bank, locate the kiosk, circumvent a kiosk's
safeguards, and deposit and send funds using the kiosk to the wallet the
scammer controls.� After providing the
instructions, the scammer stays in constant contact with the prospective victim
until the payment is completed.
���� The
legislature also finds that after the scams are complete, victims face
significant barriers to recovering their losses.� First, scammers quickly route funds to
offshore platforms once the transactions are complete, which makes it very
difficult to recover from the scammers.�
Second, the operators have consistently argued that, while the cash may
be in the machine, the victim's money has already been transferred to the
scammer, and the operator is unable to assist the victim in recovering the
money.
���� The
legislature finds that the proliferation of digital financial asset transaction
kiosks and their increased use to facilitate scam payments has led to Americans
losing millions of dollars.� In 2024, the
Federal Bureau of Investigation's Internet Crime Complaint Center received more
than 10,956 complaints reporting the use of kiosks, with reported victim losses
of approximately $246,700,000.� That
represents a ninety-nine per cent increase in the number of complaints and
thirty-one per cent increase in reported victim losses from 2023.� In the first six months of 2025, Americans
lost around $240,000,000 in kiosk scams, a rate that is twice as high as in
2024.
���� Furthermore,
several independent investigations, including investigations by the attorneys
general for the District of Columbia and Iowa, have determined that a
significant portion of transactions � as high as ninety per cent � were
fraudulent transactions.� Therefore,
these kiosks pose a significant threat to the financial safety of the residents
of this State.
���� Accordingly,
the purpose of this Act is to prohibit, beginning October 1, 2026, the
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.
���� SECTION
2.� Chapter 481B, Hawaii Revised
Statutes, is amended by adding a new section to part I to be appropriately
designated and to read as follows:
���� "�481B-   � Digital financial asset transaction
kiosks; prohibition on deposits.� (a)�
Beginning October 1, 2026, it shall be an unlawful practice under this
chapter for an operator to own, operate, or manage in the State a digital
financial asset transaction kiosk that accepts United States currency from a
customer in exchange for a digital financial asset.
���� (b)�
Nothing in this section shall prohibit an operator from owning, operating,
or managing in the State a digital financial asset transaction kiosk that accepts
a digital financial asset from a customer in exchange for:
���� (1)� A different digital financial asset; or
���� (2)� United States currency.
���� (c)�
Each transaction in violation of subsection (a) shall be a separate
offense.
���� (d)�
As used in this section:
���� "Cash" means physical United
States currency, including coins and paper currency.
���� "Digital
financial asset" means a digital representation of value that is used as a
medium of exchange, unit of account, or store of value, and that is not legal
tender, regardless of whether denominated in legal tender.� "Digital financial asset" does not
include:
���� (1)� A transaction in which a merchant grants,
as part of an affinity or rewards program, value that cannot be taken from or
exchanged with the merchant for legal tender, bank or credit union credit, or a
digital financial asset;
���� (2)� A digital representation of value issued by
or on behalf of a publisher and used solely within an online game, game
platform, or family of games sold by the same publisher or offered on the same
game platform; or
���� (3)� A security registered with or exempt from
registration with the United States Securities and Exchange Commission or a
security registered or exempt from registration under chapter 485A.
���� "Digital
financial asset transaction kiosk" means an electronic information
processing device that is capable of accepting or dispensing United States
currency by means of credit card or cash in exchange for a digital financial
asset.
���� "Operator"
means a person who owns, operates, or manages a digital financial asset
transaction kiosk located in the State."
���� SECTION 3.� New statutory material is underscored.
���� SECTION 4.� This Act shall take effect upon its approval.
Report Title:
Consumer
Protection; Digital Financial Assets; Virtual Currencies; Kiosks; Prohibition;
Purchases
Description:
Beginning
10/1/2026, prohibits the 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.� (CD1)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.