US Crypto Users Missed Receiving Over $2.5 Billion In Airdrops Due To Geoblocking: Report

Geoblocking policies in cryptocurrency airdrops may have cost Americans up to $2.6 billion in potential earnings from 2020 to 2024, a report released Monday revealed.

What Happened: Dragonfly, a cryptocurrency-focused venture capital firm, published a report detailing the financial impact of geoblocking policies on U.S. users in airdrops—a marketing stunt that involves sending free tokens to users to promote a project and drive engagement.

According to the report, 11 out of the 12 airdrops analyzed used geoblockers to prevent U.S. residents from participating or receiving tokens. Due to these geographical restrictions, U.S. users may have missed out on anywhere between $1.84 and $2.64 billion in potential revenue from 2020-2024.

Moreover, the Treasury Department may have missed federal tax revenue of up to $1.38 billion due to geoblocked airdrop income.

See Also: House Committee Favors Stablecoin Regulation To ‘Strengthen’ Dollar: Majority Whip Says CBDCs Against ‘American Values’

The report included analysis of token airdrops such as ApeCoin APE/USD, linked to the Bored Ape Yacht Club non-fungible token, in addition to Arbitrum ARB/USD and EigenLayer EIGEN/USD.

Why It Matters: The SEC’s position on cryptocurrency airdrops has been ambiguous, with non-binding guidance in 2019 indicating that an airdrop “may constitute” a sale or distribution of securities.

The agency hasn’t issued a comprehensive regulation, though, specifically addressing airdrops. To be on the safer side, many cryptocurrency projects started blocking U.S. residents from accessing airdrops.

A few prominent members of Congress wrote to former SEC Chair Gary Gensler in September 2024, pressing for clarity on the regulatory stance.

Over the years, scammers have exploited the allure of airdrops or free tokens to con unsuspecting users. The modus operandi involves creating fake airdrop campaigns, which impersonate legitimate projects, and then using deceptive tactics to trick users into connecting their wallets to phishing websites.

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