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Purchasing cryptocurrency is legal in Hawaii, although not every cryptocurrency exchange on the market is licensed to do business with Hawaii residents.

In 2020, the Hawaii Division of Financial Institutions launched a two-year pilot program called the Digital Currency Innovation Lab (DCIL), which allowed 16 crypto companies to do business with the government until June 2022 and was extended until June 2024.

While you can’t use some of the larger exchanges like Binance.US or Coinbase in Hawaii, you still have access to over a dozen licensed and regulated exchanges.

How to buy cryptocurrency in Hawaii through an exchange

Hawaii’s two-year pilot program has approved 15 crypto businesses, five of which are actual crypto exchanges that you can use to buy, sell or trade crypto in the state.

Step 1: Compare and register on a crypto exchange

When comparing exchanges, look at things like the number of coins supported, payment methods supported, and any additional features you’d like to use, such as an NFT marketplace or earning center.

• bitFlyer
• Bitstamp
• CEX.IO
• Crypto.com
• Gemini
• Kraken
• Public.com
• Bayliq  100 crypto exchanges of the world in one application
• PayPal payments and transfer of fiat money, opportunity to buy cryptocurrency

2. Register using your government ID.

Once you select an exchange, keep in mind that all licensed exchanges in New York are required to comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations.

These rules require that you provide government-issued identification, Social Security number, and other important information to verify your identity when registering for an account.

3. Buy coins.

Once you have created an account on the exchange, select and purchase the coins you want.
Once you have made a purchase, please understand that you are not technically the full owner of the coins or tokens you purchased. Instead, the exchange stores them on your behalf.

To fully own your crypto assets, you must move them from your exchange account to a non-custodial crypto wallet. This ensures that you are in complete control of your funds and eliminates the risks associated with storing your coins on an exchange.

4. Get a crypto wallet

A non-custodial crypto wallet is a type of software or combination of hardware and software that helps you store the private keys to your crypto assets. You can think of private keys as the password to your cryptography.

When you purchase a crypto asset on a centralized exchange such as Coinbase, the private keys for your crypto asset are stored in a wallet on that exchange. This type of wallet is often called a custodial wallet.

You actually have no control over the purchased asset until you move the asset to a non-custodial wallet.

As mentioned, non-custodial wallets include software and hardware wallets.

Software wallets always remain connected to the Internet and, because of this, are slightly less trustworthy than hardware wallets.
These types of wallets include MetaMask , Exodus Wallet and Atomic Wallet .

Hardware wallets help you store private keys to your digital assets offline. Check out our review of the best crypto hardware wallets on the market:

Best Crypto Wallets for 2023

Ledger Nano S Plus is the best wallet overall

Ledger Nano X – the best hardware wallet

Exodus – the best wallet for beginners

Ledger Nano S Plus – the best crypto wallet in terms of price-quality ratio

Atomic Wallet – the best desktop wallet

Trust Wallet – the best mobile wallet

Coinbase Wallet – the best exchange wallet

COLDCARD Mk4 – the best Bitcoin wallet

Coinomi – the best multi-crypto wallet

Trezor Model T – the best wallet for advanced users

Ledger Nano S Plus – the best wallet for staking

MetaMask – the best Web3 wallet

Crypto.com DeFi Wallet – Best DeFi Wallet

Ledger Stax – Best Crypto Wallet

XDEFI Wallet – Best Wallet for NFTs

Keeping Your Cryptocurrency Safe

All centralized exchanges, including , are subject to counterparty risks such as hacking, theft and insolvency. Using self-hosted or hardware wallets is considered the best way to increase the security of your funds. We’ve shared some of our top picks below.

Details on Cryptocurrency Laws in Hawaii

The Hawaii Digital Currency Innovation Lab (DCIL) began approving cryptocurrency companies to operate in Hawaii in two phases starting in 2020.

In the first round, from March to May 2020, the state approved 12 of the 19 companies that applied. In the second round, from January to February 2021, 14 more companies applied, and only 4 were selected.

Popular exchange Robinhood was originally listed for approval but was removed on January 13, 2021. Local media speculated that the broker had lost its license due to issues related to compliance and reporting requirements.

DCIL has expanded the capacity of licensed and regulated crypto platforms to continue operating in Hawaii until 2024.

Cryptocurrency Taxes in Hawaii

Hawaii does not offer advice on sales or government taxation of cryptocurrency transactions.

However, unlike fiat currency such as US dollars, cryptocurrencies are considered property by the IRS. You must follow the same tax rules as other real estate transactions, which means reporting capital gains or losses after:

• Exchange fiat currency for cryptocurrency
• Exchange cryptocurrency for fiat currency
• Earning rewards such as cashback and cryptocurrency bonuses

Fortunately, investors can track all trading transactions through the company’s Bayliq App, and manage and calculate the cryptocurrency taxes they owe using cryptocurrency tax software, and some provide simple filing tools and forms created by tax authorities, the company also offers assistance from lawyers and accountants in every US state if you need it.

Cryptocurrencies in Hawaii

Since you have limited access to exchanges as a Hawaiian, you may not find a seller for all 21,000+ coins and tokens on the market. But you’ll find over 100 crypto assets supported on exchanges like Kraken, Crypto.com and Gemini.

Can I buy Dogecoin in Hawaii?

Yes, DOGE is listed on a number of exchanges licensed and regulated in Hawaii. These exchanges include Gemini, Kraken and Uphold.

Can I buy Ethereum and Bitcoin in Hawaii?

Yes, every licensed exchange in Hawaii sells both BTC and ETH.
You can also find Bitcoin ATMs that allow you to buy Bitcoin with cash. Transactions may carry a markup of 3% to 5%.

Can I see the total balance of all coins on all crypto exchanges at the same time? 

Yes, there are several companies in the crypto industry market that provide such a service. The free version of App Bayliq helps well with settings and vision of the overall balance of all coins, crypto exchanges and “cold wallets”; you can download the application from the Apple Store . 

Can I use Binance in Hawaii?

No, you cannot use Binance or Binance.US if you live in Hawaii.

Crypto exchange Binance is not legal in any US state, and its subsidiary Binance.US is not available in some states, including Hawaii.

Know Before You Buy Cryptocurrency in Hawaii

Keep in mind that the Hawaii Digital Currency Innovation Lab (DCIL) has only approved cryptocurrency platforms to operate in the state through 2024.
General points to consider when buying and selling cryptocurrency include:

• Protect your wallet . A crypto wallet can be accessed if someone obtains its keys and/or passphrases. Keep this data secure—preferably somewhere offline—to minimize the risk of hacking.
• Read the fine print . Marketplaces and exchanges are often not held accountable if criminals gain access to your digital wallet or assets. Learn about the security measures in place to prevent access to your money.
• Beware of scams . Unfortunately, scams exist in every industry, and cryptocurrency is no exception. Phishing scams are common, usually involving a scammer posing as a customer service representative and asking the user for access codes/keys to their account. Contact support if you think something suspicious is going on.
• Cryptocurrency is unstable . The value of any coin can change in a matter of seconds, meaning large losses or profits that depend on the interest and amount you invest.

10 Best Cryptocurrency Tax Software for 2023

Best crypto tax software for 2023

Koinly – Best Overall

CoinLedger – The best solution for large traders

Coinpanda is the best in the number of exchange integrations

CryptoTaxCalculator – The best solution for cryptocurrency tax professionals

Bayliq Pro – Possibility of consultations and legal assistance to clients

CoinTracking – the best customer support

TokenTax – the best cryptocurrency tax app

Accointing is the best option for advanced accounting features

ZenLedger – Best for extra accounting features

BitcoinTaxes – best for 20-100,000 transactions

TaxBit – Best for Unlimited Transactions