RELATING TO CONSUMER PROTECTION.

HB1647

HOUSE OF REPRESENTATIVES

H.B. NO.

1647

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

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 � commonly referred to 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 ID, 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, bank, 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,
various independent investigations have found that a significant portion of
transactions on some machines, in some cases as high as ninety per cent, were
fraudulent transactions.
�
Therefore,
these kiosks are abnormally dangerous and pose a significant threat to the
financial safety of the residents of this State.

����
Accordingly,
the purpose of this Act is to subject hosts of digital financial asset
transaction kiosks to civil penalties for acts of fraud committed through the
use of the digital financial asset transaction kiosk located on the host's
premises.

����
SECTION 2.
�
Chapter 481B, Hawaii Revised Statutes, is
amended by adding a new section to be appropriately designated and to read as
follows:

����
"
�481B-
�
Digital financial asset kiosk; fraud; host
liability.
�
(a)
�

A host of a digital financial asset transaction kiosk shall have a duty
to supervise the use of the digital financial asset transaction kiosk to
prevent acts of fraud being committed through the use of the digital financial
asset transaction kiosk on the host's premises.

����
(b)
�
Notwithstanding any provision in chapter 480
to the contrary, if an act of fraud is committed through the use of the digital
financial asset kiosk on the host's premises, the host shall be fined $500,
which shall be collected in the manner provided in section 480-3.1.

����
(c)
�
In the case of hosts that enter into a
contractual relationship with an operator to host the operator's digital
financial asset transaction kiosk on the person's premises, this section shall
apply to:

����
(1)
�
Contracts to host an operator's digital
financial asset transaction kiosk entered into on or after the effective date
of this Act; and

����
(2)
�
Beginning July 1, 2027, all contracts to
host an operator's digital financial asset transaction kiosk in effect as of the
day before the effective date of this Act.

����
(d)
�
For purposes of this section:

����
"Cash" means physical United States
currency, both 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.

����
"Host
of a digital financial asset transaction kiosk" or "host" means:

����
(1)
�
An operator, if the digital financial asset
transaction kiosk is located on the premises owned or leased by the operator;
or

����
(2)
�
A person that is in a contractual
relationship with an operator to host the operator's digital financial asset
transaction kiosk on the person's premises.

����
"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.

INTRODUCED BY:

_____________________________

Report Title:

Digital
Financial Asset Transaction Kiosk; Hosts; Liability

Description:

Subjects
hosts of digital financial asset transaction kiosks to civil penalties for acts
of fraud committed through the use of the digital financial asset transaction
kiosk located on the host's premises.
�

Applies to contracts to host digital financial asset transaction kiosks
that are entered into on or after the effective date of this Act.
�
Beginning 7/1/2027, applies to contracts to
host digital financial asset transaction kiosks that are in effect as of the
day before the effective date of this Act.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.