Financial Integrity Monitor

United States — Hawaii US-HI

Domains (D1–D6)

Sources

Role actions

Jurisdiction profile

CompliantTier BRisk: IncreasingMixed

Hawaii operates under the federal BSA/AML framework (FinCEN, OFAC) plus state money-transmitter licensing via the DCCA Division of Financial Institutions.

Real-estate laundering exposure is addressed through FinCEN's Honolulu/Maui/Hawaii/Kauai county Geographic Targeting Orders; the broader federal Residential Real Estate Rule was vacated by a federal court in March 2026, leaving GTOs as the primary transparency tool pending appeal.

Key deficiencies

Federal Corporate Transparency Act now exempts all domestic (US-formed) reporting companies from beneficial ownership disclosure, removing federal BO visibility for Hawaii-registered LLCs used in real-estate and shell-company structuring
Residential Real Estate Rule (national BO-at-closing reporting requirement) vacated by court order March 19, 2026, with FinCEN/DOJ appeal pending, leaving time-limited GTOs as the sole federal all-cash real estate transparency tool for Hawaii's four counties
High elder and tourist population exposure to crypto-ATM/kiosk-enabled pig-butchering and romance-investment fraud pipelines, per national FinCEN and FBI IC3 typology data
Thin volume of Hawaii-specific (as opposed to national/federal) public enforcement reporting, limiting independent verification of state-level AML effectiveness

Recent developments (18m)

FinCEN renewed and later postponed/reissued Residential Real Estate GTOs covering Honolulu, Maui, Hawai'i, and Kaua'i counties (2025)
FinCEN postponed Residential Real Estate Rule reporting requirements to March 1, 2026; rule then vacated by U.S. District Court (E.D. Tex.) March 19, 2026, under appeal
FinCEN alert (March 2025) confirmed domestic reporting companies and their beneficial owners are exempt from Corporate Transparency Act BOI reporting, a nationwide policy reversal affecting Hawaii-formed entities
FinCEN issued CVC kiosk notice (FIN-2025-NTC1, August 2025) addressing elder-targeted crypto-ATM fraud typologies applicable to Hawaii's retiree and tourist population
OFAC designations against Prince Group TCO/Huione Group (Oct 2025) and DPRK IT-worker facilitation networks (March 2026) reshape the national sanctions-evasion and CPF architecture within which Hawaii-domiciled financial institutions and MSBs operate

Weekly brief

Lead signal

Lead Signal

Read full brief

Lead Signal

Hawaii's crypto money-transmission posture remains a structural outlier within the federal AML/CFT architecture. The Hawaii Division of Financial Institutions has determined that digital currency and digital-asset trading and transmission activity is not subject to the state's Money Transmitters Act licensing requirement, a determination that took effect July 1, 2024, following the conclusion of the state's Digital Currency Innovation Lab. Two independent Tier-1 Hawaii state sources corroborate the determination. The practical effect is a narrowing of the state-level AML supervisory perimeter: Hawaii-domiciled or Hawaii-serving digital-asset firms conducting standalone crypto activity face no state AML/CDD licensing overlay, relying solely on federal FinCEN money-services-business registration and program obligations. This state-level enablement signal sits in tension with a 2026 legislative proposal, SB2757 (Digital Asset Charters), which would reintroduce a state chartering framework for digital-asset businesses and explicitly finds that the industry is largely unregulated in the United States. If enacted, SB2757 would close the supervisory gap the 2024 determination opened; as introduced, it has not yet passed. This is an architecture-level story, not an incident: the interesting fact is what the state chose not to require, not any single enforcement action.

Other Developments

Federal stablecoin AML and sanctions rulemaking advances. On April 8, 2026, Treasury issued a joint notice of proposed rulemaking through FinCEN and OFAC to implement the AML/CFT and sanctions provisions of the GENIUS Act for Permitted Payment Stablecoin Issuers. The proposal would establish a stand-alone BSA framework at a new 31 CFR Part 1033, and represents the first sanctions compliance program requirement targeted at a specific category of US person. The comment period closed June 9, 2026. This applies to any Hawaii-domiciled or Hawaii-serving stablecoin issuer irrespective of the state's otherwise light-touch crypto posture, since it is a federal requirement layered on top of, not substituting for, the state gap.

FinCEN proposes a structural AML/CFT program overhaul. A separate NPRM would fundamentally reform AML/CFT program requirements for financial institutions, inserting counter-terrorist-financing terminology and effectiveness-based requirements into what has historically been an AML-only program rule. This is a structural development applicable across all US jurisdictions, including Hawaii, and would apply to the federal BSA baseline that Hawaii-based crypto and financial firms currently rely on in the absence of state-level AML licensing for standalone digital-asset activity.

FinCEN proposes a whistleblower incentive program. A further NPRM would operationalize financial incentives for reporting BSA, AML, and sanctions violations, with comments due June 1, 2026. No prior FinCEN-administered monetary whistleblower channel existed for BSA or sanctions violations; this would be a new enforcement-support architecture layered onto the existing framework.

FATF grey list update (no direct US-HI nexus). The FATF June 2026 Plenary added Iraq and Bosnia and Herzegovina to its grey list and removed Algeria and Namibia, bringing the list to twenty-two jurisdictions under increased monitoring. This is tracked for fleet completeness; no direct nexus to US-HI has been identified this cycle.

Cross-Monitor Connections

The Hawaii crypto money-transmission exemption and the SB2757 charter proposal are the same underlying facts surfaced independently in the World Payments Monitor's licensing and market-access tracking and in the crypto monitor's licensing and stablecoin-regime modules. Where this monitor foregrounds the AML supervisory-perimeter reading, the payments and crypto monitors foreground the market-access and product-classification readings of the identical determination and bill. The federal GENIUS Act stablecoin AML and sanctions NPRM likewise recurs across all three monitors: here as an AML/CFT architecture development, in world-payments as a stablecoin regulatory-framework development, and in the crypto monitor as a stablecoin-regime development. Readers tracking Hawaii's digital-asset posture across monitors should expect to see the same primary sources cited from each analytical angle rather than duplicated independent findings.

Outlook

The near-term marker to watch is whether SB2757 advances beyond its current form; passage would formalize a state chartering regime and close the AML supervisory gap that has existed since the 2024 determination, converting an enablement signal into a more conventional licensing-and-oversight structure. At the federal level, the GENIUS Act stablecoin AML/sanctions NPRM and the broader AML/CFT program-modernization NPRM are both past their comment-period close and moving toward finalization; either would reshape the federal BSA baseline Hawaii firms currently depend on in the absence of state licensing. No US-HI-specific FATF mutual-evaluation status has yet been established to primary-source standard, an open gap for future cycles.

weekly_brief_draft · JID US-HI

Domain intelligence (D1–D6)

D1 Sanctions

Not covered

Sanctions is not yet covered for this jurisdiction in this report.

D2 Beneficial Ownership

Not covered

Beneficial Ownership is not yet covered for this jurisdiction in this report.

D3 Enabler Jurisdictions

Not covered

Enabler Jurisdictions is not yet covered for this jurisdiction in this report.

D4 Conflict Finance

Not covered

Conflict Finance is not yet covered for this jurisdiction in this report.

D5 Crypto, Digital Assets, and Financial Innovation

Crypto / Digital Assets / Financial Innovation

Hawaii presents an unusual case in the crypto/AML architecture: a state regulator has determined, rather than a legislature having enacted, that standalone digital-currency trading and transmission activity does not require a state money-transmitter license. The Hawaii Division of Financial Institutions issued this determination effective July 1, 2024, following the conclusion of the state's Digital Currency Innovation Lab, a multi-year regulatory sandbox program. Two independent Tier-1 Hawaii government sources corroborate the determination, giving it High confidence in this cycle's assessment. The practical consequence is that Hawaii-domiciled or Hawaii-serving crypto-asset operators conducting purely digital-asset activity now sit entirely within the federal AML/CFT perimeter, registered as money services businesses with FinCEN and subject to the Bank Secrecy Act, without any additional state-level AML/CDD licensing overlay of the kind still found in many peer states.

This is a structural enablement signal, in the architecture-over-incident sense: no enforcement action produced this outcome, and none is needed to sustain it, since the exemption is a standing regulator interpretation rather than a statute the legislature would need to repeal. That interpretive basis is also its principal vulnerability. Hawaii's 2026 legislature is separately considering SB2757, the Digital Asset Charters bill, which would create a new state chartering framework for digital-asset businesses. SB2757's legislative findings explicitly characterize the digital-asset industry as largely unregulated in the United States, a finding that, if the bill advances, would directly supersede the 2024 exemption by reintroducing a state authorization pathway specific to crypto firms. As introduced, SB2757 has not been enacted, and its assessed confidence reflects that it remains a proposed rather than settled framework.

Layered above this state-level picture is the federal GENIUS Act stablecoin rulemaking. On April 8, 2026, FinCEN and OFAC jointly proposed to implement the AML/CFT and sanctions provisions of the GENIUS Act for Permitted Payment Stablecoin Issuers, establishing a stand-alone Bank Secrecy Act framework at a new 31 CFR Part 1033. This is characterized as the first sanctions compliance program requirement imposed on a specific category of US person, and it applies with full force to any Hawaii-based or Hawaii-serving stablecoin issuer regardless of the state's otherwise permissive crypto-licensing posture. The comment period on this NPRM closed June 9, 2026, moving it toward a final rule. Read together, Hawaii's digital-asset financial-integrity profile this cycle is one of a narrow, regulator-driven state licensing gap sitting beneath an expanding and increasingly sanctions-specific federal compliance architecture, two layers moving in opposite directions, one loosening and one tightening, simultaneously.

Outlook

The central question for the next cycle is sequencing: whether SB2757 advances through the Hawaii legislature before, after, or independently of the federal GENIUS Act stablecoin rule reaching finalization. If SB2757 passes, Hawaii's digital-asset AML architecture would shift from a federal-only default back toward a hybrid state-federal model. If the federal stablecoin NPRM finalizes first, Hawaii-serving stablecoin issuers would face a new sanctions compliance program requirement irrespective of the state legislative outcome. Both tracks warrant monitoring in parallel, since neither outcome is contingent on the other.

D6 Compliance Technology & Active Defence

Not covered

Compliance Technology & Active Defence is not yet covered for this jurisdiction in this report.

D7 AML/CTF Regime

AML/CTF Regime

The federal AML/CTF regime applicable to US-HI saw two structural rulemaking developments this cycle, both flowing from FinCEN rather than any Hawaii-specific action. First, FinCEN issued a notice of proposed rulemaking that would fundamentally reform the requirements for financial institutions' AML/CFT programs, inserting counter-terrorist-financing terminology and effectiveness-based requirements into what has historically been an AML-only program rule under the Bank Secrecy Act. This is an architecture-level change: it does not respond to a single incident but rewrites the baseline expectation for how institutions design and evidence the adequacy of their compliance programs, a change that would apply uniformly to Hawaii-domiciled financial institutions as it would nationwide. Second, FinCEN proposed a whistleblower program that would operationalize financial incentives for reporting BSA, AML, and sanctions violations, with the comment period closing June 1, 2026. No FinCEN-administered monetary whistleblower channel for BSA or sanctions violations existed prior to this proposal, making it a new enforcement-support mechanism rather than an incremental adjustment to an existing one.

Separately, and at a global rather than jurisdictional level, the FATF's June 2026 Plenary updated its grey list, adding Iraq and Bosnia and Herzegovina and removing Algeria and Namibia, bringing the total under increased monitoring to twenty-two jurisdictions. No direct nexus between this update and US-HI has been identified this cycle; it is carried in this brief for fleet-wide completeness rather than as a Hawaii-specific finding. Notably, no US-HI-specific or US federal mutual-evaluation status has been established to primary-source standard this cycle, which remains an open evidentiary gap rather than a confirmed null finding.

Taken together, the AML/CTF architecture governing US-HI this cycle is being reshaped almost entirely at the federal layer, through the BSA program-modernization NPRM and the whistleblower NPRM, with no genuine subnational divergence identified beyond the crypto money-transmission licensing gap tracked separately under the crypto and digital-assets domain. The absence of state-specific AML/CTF rulemaking in Hawaii this cycle is itself consistent with the state's broader pattern of relying on federal frameworks rather than layering additional state requirements.

Outlook

Both FinCEN NPRMs are past their comment-period close and moving toward potential finalization; either would materially change the compliance-program and enforcement-exposure baseline for financial institutions operating in or through Hawaii. The next cycle should also look for progress toward closing the US federal mutual-evaluation gap noted in this cycle's evidence, and for any indication that Hawaii's legislature intends to layer state-specific AML requirements onto the federal baseline, which nothing in this cycle's evidence currently suggests is under consideration.

Regulatory horizon

No dated horizon items this cycle. 4 items tracked without a confirmed date.

4 pending date · baseline fim-2026-07-05

Role action cards

MLROHigh

FinCEN advances a stablecoin AML/sanctions NPRM and a broader AML/CFT program-modernization NPRM, both applicable to Hawaii-nexus institutions.

Any Hawaii-domiciled or Hawaii-serving stablecoin issuer would face a new stand-alone BSA and sanctions compliance program requirement under 31 CFR Part 1033 if finalized, and the separate program-modernization NPRM would insert CFT and effectiveness-based expectations into existing AML program design nationwide.

3 evidence refs

ComplianceHigh

Hawaii's crypto money-transmission exemption persists via regulator determination while SB2757 and two federal NPRMs advance in parallel.

The policy-gap and jurisdictional-change picture for Hawaii-nexus crypto and financial firms is active on three fronts at once: a non-statutory state exemption, a pending state charter bill, and two federal rulemakings that would apply irrespective of the state outcome.

4 evidence refs

LegalAssessed

The GENIUS Act stablecoin NPRM introduces the first sanctions compliance program requirement for a specific category of US person.

This is a novel liability and enforcement-trajectory exposure for stablecoin-issuer clients, distinct from generic BSA obligations, and its interaction with Hawaii's otherwise permissive state crypto-licensing posture should be assessed independently.

2 evidence refs

BoardAssessed

Hawaii's state-level AML supervisory perimeter for crypto activity is narrower than in many peer states, with a pending bill that could reverse it.

This is a structural, reputational-relevant fact for any board overseeing Hawaii-nexus digital-asset exposure: the current favorable posture rests on regulator interpretation, not statute, and SB2757 is a live legislative track that could change it.

2 evidence refs

CTOHigh

Federal stablecoin AML/sanctions rulemaking and Hawaii's crypto licensing gap both bear directly on digital-asset infrastructure design.

Technical architecture decisions for stablecoin issuance or Hawaii-facing crypto products should anticipate the 31 CFR Part 1033 sanctions-screening framework and should not assume the current state licensing gap is a durable design assumption given SB2757's pendency.

3 evidence refs

RiskAssessed

Two opposing regulatory vectors, state-level crypto enablement and federal-level AML/CFT tightening, are active simultaneously for Hawaii-nexus exposure.

Exposure-concentration models for Hawaii-facing crypto and stablecoin activity should reflect both the loosening state posture and the tightening federal program-modernization and sanctions-screening trajectory, since the two do not move together.

3 evidence refs

OperationsAssessed

A new stand-alone sanctions screening obligation is proposed for permitted payment stablecoin issuers.

Transaction-screening workflows for any Hawaii-nexus stablecoin issuance activity should anticipate the proposed 31 CFR Part 1033 framework, which introduces a sanctions compliance program requirement not previously codified for this category of US person.

1 evidence refs

AuditPossible

FinCEN's proposed AML/CFT program reform would insert effectiveness-based requirements into existing program design.

Control-testing scope for AML program adequacy should anticipate a shift from legacy AML-only checklist testing toward effectiveness-based evidentiary standards if this NPRM is finalized.

1 evidence refs

Decision lens

MLRO

FinCEN advances a stablecoin AML/sanctions NPRM and a broader AML/CFT program-modernization NPRM, both applicable to Hawaii-nexus institutions.

Compliance

Hawaii's crypto money-transmission exemption persists via regulator determination while SB2757 and two federal NPRMs advance in parallel.

Legal

The GENIUS Act stablecoin NPRM introduces the first sanctions compliance program requirement for a specific category of US person.

Board

Hawaii's state-level AML supervisory perimeter for crypto activity is narrower than in many peer states, with a pending bill that could reverse it.

CTO

Federal stablecoin AML/sanctions rulemaking and Hawaii's crypto licensing gap both bear directly on digital-asset infrastructure design.

Risk

Two opposing regulatory vectors, state-level crypto enablement and federal-level AML/CFT tightening, are active simultaneously for Hawaii-nexus exposure.

Operations

A new stand-alone sanctions screening obligation is proposed for permitted payment stablecoin issuers.

Audit

FinCEN's proposed AML/CFT program reform would insert effectiveness-based requirements into existing program design.

Shared evidence: 4 refs

Scenario sketches

EU AML Package and AMLA Supervisory Transition

Illustrative orientation only: as the EU AML Package matures, direct and indirect AMLA supervision of cross-border obliged entities under the AMLA Regulation (Reg (EU) 2024/1620), alongside the directly applicable AMLR (Reg (EU) 2024/1624) and per-Member-State transposition of the sixth AML Directive, could gradually shift the center of gravity in EU AML supervision from purely national authorities toward a hybrid EU-level regime. This is a structural, architecture-level illustration of how a supervisory perimeter could evolve, not an observed development in any single jurisdiction this cycle, and it has no confirmed nexus to US-HI.

Illustrative scenario for analytical orientation only. Not compliance advice, not a prediction, and not a statement of observed fact.

Standing trackers (T1–T6)

Tracker	Status	Note
T1 · Russian Sanctions-Evasion Architecture	stable	No material US-HI-nexus finding this cycle.
T2 · EU AML Package / AMLA	no_change	Not applicable to US-HI (non-EEA jurisdiction); tracked for fleet completeness only.
T3 · FATF Grey List	material_change	June 2026 FATF Plenary added Iraq and Bosnia and Herzegovina, removed Algeria and Namibia, bringing the list to 22 jurisdictions; no direct US-HI nexus.
T4 · Beneficial-Ownership Register Status	stable	No US-HI-specific CTA variance or state BO-registry development identified this cycle.
T5 · Crypto & Digital-Asset Integrity	material_change	Federal GENIUS Act AML/sanctions NPRM for stablecoin issuers advances while Hawaii's state crypto exemption remains in force and SB2757 proposes a new state charter regime.
T6 · Sanctions Regime Divergence	stable	No US-HI-specific sanctions-divergence signal identified this cycle.

Registers

Enforcement actions

FinCEN renewed and reissued Geographic Targeting Orders requiring title insurers to identify and report the natural persons behind legal entities used in non-financed, all-cash residential real estate purchases above $300,000 across Hawaii's four counties among other US metros. 9 Oct 2025
OFAC designated the Prince Group TCO and 146 associated targets, alongside a $15 billion DOJ bitcoin forfeiture action, for running forced-labor 'pig butchering' scam compounds in Cambodia that victimized Americans nationwide, including potentially Hawaii residents given the scheme's broad US targeting. 14 Oct 2025
FinCEN imposed a Section 311 special measure designating Huione Group a foreign financial institution of primary money laundering concern, severing its access to the US financial system and thereby affecting US financial institutions', including Hawaii-based institutions', counterparty and correspondent screening obligations. 16 Oct 2025
OFAC sanctioned facilitators of North Korean IT-worker fraud schemes generating nearly $800 million in 2024 for DPRK weapons programs, using cryptocurrency to move illicit earnings — a scheme typology (fraudulent remote employment) with potential exposure for Hawaii's remote-hiring technology and services sector. 12 Mar 2026
FinCEN issued Notice FIN-2025-NTC1 urging increased vigilance regarding cryptocurrency ATM/kiosk fraud, citing a 99% increase in FBI IC3 complaints involving CVC kiosks and reminding financial institutions of BSA reporting obligations applicable to Hawaii-licensed money transmitters operating such kiosks. 4 Aug 2025

Sanctions changes

OFAC designated Prince Group TCO, Chen Zhi, and associated entities for operating pig-butchering scam networks; expanded on October 30, 2025 to add 25 additional bitcoin addresses to Chen Zhi's SDN listing. 14 Oct 2025
OFAC designated the Democratic Karen Benevolent Army (DKBA), a Burma-based armed group, plus four senior leaders and companies linked to Chinese organized crime, for supporting cyber scam centers targeting Americans. 12 Nov 2025
OFAC designated six individuals and two entities (Amnokgang Technology Development Company, Quangvietdnbg) spanning DPRK, Vietnam, Laos, and Spain for facilitating North Korean IT-worker fraud and currency-conversion schemes. 12 Mar 2026
Following the October 22, 2025 designation of Lukoil, OFAC issued a series of general licenses (GL 128B/C, 131A-G) authorizing wind-down, divestment negotiation, and maintenance of Lukoil International GmbH entities and retail service stations outside Russia, with authorizations progressively extended into mid-to-late 2026. 10 Dec 2025

Regulatory horizon (register)

Appeal outcome on vacated Residential Real Estate Rule
Status of Hawaii-county real estate GTOs after Feb 2026 expiration
GENIUS Act stablecoin implementing regulations finalization
FATF October 2026 review of Iran countermeasures under new UK Presidency

Active schemes

All-cash shell-company real estate layering, Hawaii counties
[HIGH] Crypto-ATM/kiosk pig-butchering pipeline targeting Hawaii residents
[HIGH] Post-CTA-exemption domestic shell company BO opacity

Sources

Coverage gaps

Since March 2025, all US-formed ('domestic reporting') compa…

Since March 2025, all US-formed ('domestic reporting') companies and their beneficial owners are exempt from Corporate Transparency Act reporting to FinCEN, eliminating federal beneficial-ownership visibility for Hawaii-registered LLCs — a structure type commonly used in real-estate and trade-based layering.

The federal Residential Real Estate Rule — intended to provi…

The federal Residential Real Estate Rule — intended to provide a permanent nationwide BO-reporting backbone for non-financed residential transfers — was vacated by a US District Court on March 19, 2026, and the underlying GTOs covering Hawaii's four counties were themselves tied to a February 28, 2026 expiration linked to that rule's implementation.

Publicly available enforcement and typology reporting specif…

Publicly available enforcement and typology reporting specific to Hawaii (as distinct from national-level federal actions applied to Hawaii by extension) is comparatively thin relative to major financial centers (New York, California, Florida), limiting independent verification of state-level AML/CFT effectiveness and DCCA Division of Financial Institutions supervisory outcomes.

Evidence

Confidence-tiered claims

No structured claims published for this jurisdiction yet.