Found the solution:
$ sudo bash
$ mkdir /etc/gcrypt
$ echo all >> /etc/gcrypt/hwf.deny
$ sudo apt-get update
Type: Posts; User: kato
Found the solution:
$ sudo bash
$ mkdir /etc/gcrypt
$ echo all >> /etc/gcrypt/hwf.deny
$ sudo apt-get update
It's July 2020 and still I haven't found a reasonable solution to this. The only way I can effectively run Kali is through an older 2018 iso and updating it from there.