RELEASE: Hawai‘i Digital Currency Innovation Lab Concludes, Public Reminded to be Aware of Risks While Investing in Digital Currency

DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS

KA ʻOIHANA PILI KĀLEPA

JOSH GREEN, M.D.

GOVERNOR | KE KIAʻĀINA

NADINE Y. ANDO

DIRECTOR | KA LUNA HOʻOKELE

IRIS IKEDA

BANKING COMMISSIONER

FOR IMMEDIATE RELEASE

June 28, 2024

Hawai'i Digital Currency Innovation Lab Concludes

Public Reminded to be Aware of Risks While Investing in Digital Currency

HONOLULU - The Hawai'i Department of Commerce and Consumer Affairs Division of Financial Institutions (DFI) and the Hawai'i Technology Development Corporation (HTDC) remind the public that the Digital Currency Innovation Lab (DCIL) concludes on June 30, 2024. This collaborative research project initiated in 2020 was created to explore the landscape of digital currency activity within the state,while assessing the regulatory framework required for companies specializing in digital currency (also known as cryptocurrency).

The 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. The companies will be able to continue transaction activity as an unregulated business. However, such companies will be responsible for complying with any applicable federal licensing or registration requirements, including those set forth by the Financial Crimes Enforcement Network,Securities and Exchange Commission,and the Financial Industry Regulatory Authority, as well asany pertinent federal regulatory requirements involving consumer protection, anti-money laundering measures, etc.

"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 to adhere to federal regulations relevant to their activities. Consumers are encouraged to remain vigilant and proactive when dealing with digital currency companies and unregulated markets.

This week, the Federal Bureau of Investigation issued a warningabout a new tactic used by criminals to defraud victims of cryptocurrency scams. Fraudsters are posing as lawyers from fake law firms on social media and messaging platforms, offering to help victims recover their funds.

They claim to be authorized to investigate such cases and may reference involvement with the FBI, Consumer Financial Protection Bureau, or other government agencies to appear legitimate. Between February 2023 and February 2024, victims of cryptocurrency scams exploited by these fictitious law firms, reported losses exceeding $9.9 million to the FBI's Internet Crime Complaint Center (IC3).

TIPS TO PROTECT YOURSELF

• Be wary of advertisements for cryptocurrency recovery services. Research the advertised company and beware if the company uses vague language, has a minimal online presence, and makes promises regarding an ability to recover funds.
• If an unknown individual contacts you and claims to be able to recover stolen cryptocurrency, do not release any financial or personal identifying information and do not send money.
• Law enforcement does not charge victims a fee for investigating crimes. If someone claims an affiliation with the FBI, contact your local FBI field officeto confirm.

The FBI also issued an alert advising the publicagainst using cryptocurrency money transmitting services that are not registered as Money Services Businesses (MSB) according to United States federal law. Cryptocurrency money transmitting services are being investigated and law enforcement operations were conducted against cryptocurrency services which were not licensed in accordance with federal law. Using a service that does not comply with its legal obligations may put you at risk of losing access to funds after law enforcement operations target those businesses.

Victims of cryptocurrency schemes or other fraudulent schemes are encouraged to file a report with the FBI's Internet Crime Complaint Center at www.ic3.gov.

Guidance and additional information from the Federal Trade Commission on 'What to Know About Cryptocurrency and Scams' is available at https://consumer.ftc.gov/articles/what-know-about-cryptocurrency-and-scams.

More information on the Digital Currency Innovation Lab is available at https://www.htdc.org/digital-currency-innovation-lab/.

###

Media Contact:

William Nhieu

Communications Officer
Department of Commerce and Consumer Affairs
Email: [email protected]

Phone: 808-586-7582

Public link

Please use the above public link if you want to share this noodl on another website.