Cryptocurrency ATM Scams Surge in Hawaii, Targeting Elderly Residents
A growing wave of cryptocurrency scams utilizing ATMs is sweeping across Hawaii, with fraudsters preying on vulnerable residents – particularly seniors – and costing them hundreds of thousands of dollars. The scams, described as an “epidemic” by one state official, involve tricking victims into depositing cash into cryptocurrency kiosks under false pretenses.
The AARP of Hawaii reported 68 complaints statewide in 2024 related to scams involving virtual currency kiosks, resulting in losses totaling $922,022. Hawaii Island accounted for 19 of those complaints. However, authorities believe the actual financial impact is significantly higher due to widespread underreporting, as many victims are reluctant to come forward.
“The number of complaints have almost doubled in a year,” said Kealii Lopez, AARP state director, during a December 3rd briefing to the state House Committee on Consumer Protection and Commerce. “So, imagine what happens if we don’t do anything.”
Rapid Proliferation of Crypto ATMs
The rise in scams coincides with a rapid increase in the number of cryptocurrency ATMs throughout the state. According to Mana Moriarty, deputy director of the state Office of Consumer Affairs, a recent count identified approximately 250 such machines operating in Hawaii. These kiosks, run by companies like CoinFlip, Bitcoin Depot, and Athena Bitcoin, allow users to convert cash into cryptocurrencies like Bitcoin. Businesses hosting the machines typically receive rent for the space.
How the Scams Work
Scammers frequently impersonate bank personnel, contacting potential victims and falsely claiming their accounts have been compromised. They then instruct the victims – often kupuna (elders) – to transfer their savings into a Bitcoin ATM for “safety,” guiding them through the process via cellphone.
“I’ve heard situations where someone – a salesperson or someone in the establishment maybe didn’t realize what was happening – saw an older person putting in money and offered the person a chair so they could sit while they’re feeding in the money – again, perhaps not realizing that it’s a scam,” Lopez explained.
Elderly are Primary Targets
Law enforcement officials confirm that the elderly are disproportionately targeted by these schemes. Hawaii Police Department Capt. Rio Amon-Wilkins of the East Hawaii Criminal Investigation Division stated that victims are often directed by phone to specific ATM locations and given detailed instructions on how to operate the machines, remaining on the line with the scammer throughout the transaction.
In one recent case in Hilo, a family member intervened as a victim was preparing to deposit over $1,000 into a cryptocurrency ATM, ultimately allowing police to recover the funds. The victim, authorities said, was prepared to deposit significantly more.
Challenges in Prosecution
Recovering stolen funds and apprehending perpetrators, however, remains a significant challenge. Law enforcement officials report that scammers are frequently located outside of the country, making investigation and prosecution extremely difficult. “It’s oftentimes quite difficult for us to track down the offenders, because many of them are out of the country,” Amon-Wilkins said. “If they’re outside the country, it’s extremely problematic for us to identify them.”
Legislative Efforts and Industry Response
AARP is actively collaborating with state lawmakers to introduce legislation aimed at curbing these scams. Proposed measures include limiting the amount of money that can be deposited per transaction, mandating refunds in cases of fraud, requiring live customer service during operating hours, providing paper receipts, disclosing fees, and establishing a dedicated contact line for law enforcement.
House Bill 1277, introduced by Rep. Jenna Takenouchi, passed the House last legislative session but stalled in the Senate. Rep. Scot Matayoshi, chairman of the House Commerce and Consumer Protection Committee, plans to introduce new legislation next year that would effectively ban the purchase of cryptocurrency through ATMs altogether, while still allowing withdrawals for those already holding digital assets.
“I’ll be introducing legislation next year to make that number zero, so that you cannot purchase money, purchase Bitcoin through an ATM at all,” Matayoshi stated.
Industry representatives, however, argue that cryptocurrency ATMs are not the primary source of scams. Jon Turke, director of government affairs for CoinFlip, cited an FBI report indicating that less than 3% of cryptocurrency scam losses occur at kiosks, with the vast majority taking place on online portals.
“Over 97% was elsewhere, on an online portal somewhere,” Turke said.
Protecting Yourself from Cryptocurrency ATM Scams
Financial institutions are reinforcing the importance of vigilance. Joely Chung, a senior vice president for First Hawaiian Bank, emphasized that legitimate financial institutions will never request sensitive information like account numbers, Social Security numbers, or passwords over the phone or via email. She advised individuals to call the bank directly using the number on the back of their credit card or dial 911 if they receive suspicious communications.
Amon-Wilkins offered a simple, yet crucial, piece of advice: “The bottom line is, if you receive a phone call instructing you to deposit money or transfer money or anything like that, if you’re not able to 100% verify who the caller is and they’re with a legit financial institution that you are a member of, don’t do it.”
