STAND. COM. REP. NO.  1059

 

Honolulu, Hawaii

                , 2025

 

RE:   H.B. No. 1277

      H.D. 2

 

 

 

 

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

 

Madame:

 

     Your Committee on Judiciary & Hawaiian Affairs, to which was referred H.B. No. 1277, H.D. 1, entitled:

 

"A BILL FOR AN ACT RELATING TO DIGITAL FINANCIAL ASSET,"

 

begs leave to report as follows:

 

     The purpose of this measure is to limit the value of daily transactions through a digital financial asset transaction kiosk to a maximum of $1,000.

 

     Your Committee received testimony in support of this measure from AARP Hawaiʻi; Hawaiʻi Family Caregiver Coalition; Hawaii Credit Union League; Holomua Collaborative; Hawaii Bankers Association; and six individuals.  Your Committee received testimony in opposition to this measure from CoinFlip.  Your Committee received comments on this measure from the Department of Commerce and Consumer Affairs.

 

     Your Committee finds that digital financial asset transaction kiosks, also known as crypto ATMs, appear as regular ATMs and allow people to conduct legitimate cryptocurrency transactions by depositing fiat to purchase cryptocurrencies that are then transferred to a digital wallet.  However, crypto ATMs are largely unregulated at the state level compared to traditional financial institutions and money service businesses, which allows the crypto ATMs to lack consumer fraud protections.  As a result, crypto ATMs can put Hawaii consumers at risk of fraudulent purchase schemes.  This measure provides a means for protecting consumers by limiting the daily amount that may be transacted through crypto ATMs.

 

     Your Committee has amended this measure to clarify the exemption under the definition of "digital financial asset" for securities registered or exempt from registration under Hawaii law.

 

     As affirmed by the record of votes of the members of your Committee on Judiciary & Hawaiian Affairs that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1277, H.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 1277, H.D. 2.

 

Respectfully submitted on behalf of the members of the Committee on Judiciary & Hawaiian Affairs,

 

 

 

 

____________________________

DAVID A. TARNAS, Chair