The Hawai‘i Department of Commerce and Consumer Affairs Division of Financial Institutions (DFI) and the Hawai‘i Technology Development Corporation (HTDC) have announced that the Digital Currency Innovation Lab (DCIL) will conclude on June 30, 2024. This research project, initiated in 2020, aimed to explore the digital currency landscape within the state and assess the regulatory framework for companies specializing in digital currency.
Findings from the project indicate that digital currency companies will no longer require a Hawai‘i-issued money transmitter license to conduct business within the state. These companies can continue their transaction activities as unregulated businesses but must comply with any applicable federal licensing or registration requirements. These include regulations set forth by the Financial Crimes Enforcement Network, Securities and Exchange Commission, and Financial Industry Regulatory Authority, along with other pertinent federal regulatory requirements involving consumer protection and anti-money laundering measures.
“As we transition from this study to a broader understanding of digital currency, our focus will remain on ensuring that consumers are aware of the risks associated with this matter. We urge the public to stay informed when utilizing any form of digital currency,” said Banking Commissioner Iris Ikeda.
Digital currency companies operating in Hawai‘i should continue adhering to relevant federal regulations. Consumers are encouraged to remain vigilant when dealing with digital currency companies and unregulated markets.
Recently, the Federal Bureau of Investigation issued a warning about a new tactic used by criminals to defraud victims through cryptocurrency scams. Fraudsters pose as lawyers from fake law firms on social media and messaging platforms, offering help to recover funds. They claim authorization to investigate such cases and may reference involvement with agencies like the FBI or Consumer Financial Protection Bureau to appear legitimate. Between February 2023 and February 2024, victims reported losses exceeding $9.9 million due to these fictitious law firms.
The FBI has also advised against using cryptocurrency money transmitting services not registered as Money Services Businesses (MSB) according to U.S. federal law. Law enforcement operations have targeted unlicensed cryptocurrency services, which may result in users losing access to their funds.
Victims of cryptocurrency schemes or other fraudulent activities are encouraged to file a report with the FBI’s Internet Crime Complaint Center at www.ic3.gov.