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Hawaii Digital Currency Innovation Lab Concludes: Kauai Now
The state Department of Commerce and Consumer Affairs, along with the Hawai’i Technology Development Corporation, is reminding the public to be aware of the risks of investing in cryptocurrency as its Digital Currency Innovation Lab wraps up at the end of the week.
A poster with tips and tricks to avoid cryptocurrency scams. (Courtesy of the Hawaii Department of Commerce and Financial Institutions Division of Consumer Affairs)
The Digital Currency Innovation Lab (DCIL) will end on Sunday 30 June. The project began in 2020 to “explore the landscape of digital currency activity within the State, while evaluating the regulatory framework required for companies specializing in digital currency (also known as cryptocurrency), the department said.
As the department stated in a recent press release:
The project results indicate that digital currency companies will no longer need a Hawaii money transmission license to conduct business in the state. The companies will be able to continue their transaction activity as an unregulated business.
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However, such companies will be responsible for complying with all applicable federal licensing or registration requirements, including those established by the Financial Crimes Enforcement Network, the Securities and Exchange Commission and the Financial Industry Regulatory Authority, as well as all relevant federal regulatory requirements involving protection of consumers, anti-money laundering measures, etc.
“As we move 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 issue. We urge the public to remain informed when using any form of digital currency,” Banking Commissioner Iris Ikeda said.
Digital currency companies operating in Hawaii must continue to comply with federal regulations relevant to their operations. Consumers are encouraged to remain vigilant and proactive when dealing with digital currency companies and unregulated markets.
This week, the F.B.I issued a warning about a new tactic being used by criminals to defraud victims of cryptocurrency scams. Scammers pose 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 point to 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 in excess of $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 company advertised and watch out if the company uses vague language, has a minimal online presence, and promises the ability to recover funds.
- If an unknown individual contacts you and claims to be able to recover the 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 anyone claims to be affiliated with the FBI, contact your FBI local office to confirm.
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The FBI also issued a notice informing the public against the use of cryptocurrency money transmission services that are not registered as Money Services Businesses (MSBs) under US federal law. Investigations into cryptocurrency money transmission services are ongoing, and law enforcement operations have been conducted against cryptocurrency services that were not licensed in accordance with federal law. Using a service that does not comply with its legal obligations could put you at risk of losing access to funds after law enforcement operations target such businesses.
Victims of cryptocurrency scams or other fraudulent schemes are encouraged to file a report with the FBI’s Internet Crime Complaint Center at www.ic3.gov.
Additional Federal Trade Commission guidance and information on “What to Know About Cryptocurrency and Scams” can be found at https://consumer.ftc.gov/articles/what-know-about-cryptocurrency-and-scams.
More information about the Digital Valuta Innovation Lab is available at https://www.htdc.org/digital-currency-innovation-lab/.