U.S. users lost up to $2.64B in crypto airdrops due to geoblocking
U.S. crypto holders affected by airdrop bans
According to a report by investment firm Dragonfly, U.S. users may have lost between $1.84 billion and $2.64 billion in potential earnings from airdrops between 2020 and 2024 due to geoblocking restrictions. As a result, U.S. tax revenue losses from these missed earnings could range from $525 million to $1.38 billion.
Over the past few years, airdrops have become a key strategy for crypto projects to drive engagement, test products, and reward users. However, many crypto projects have blocked U.S. users from claiming airdrops due to regulatory uncertainty, as the SEC previously classified some airdrops as potential distributions of unregistered securities.
Millions of U.S. crypto holders affected by airdrop bans
Dragonfly, a crypto-focused venture capital firm that has invested in over 120 blockchain projects, estimates that between 920,000 and 5.2 million U.S. crypto holders were affected by airdrop geoblocking from 2020 to 2024.
This restriction potentially cost U.S. users between $1.84 billion and $2.64 billion in lost earnings.
Politically sensitive airdrops
The study highlights that in 2024, U.S. users owned 22-24% of all active crypto wallets, yet they were excluded from most major airdrops.
Dragonfly analyzed 11 major airdrops unavailable in the U.S., including:
Arbitrum
Optimism
Blur
ApeCoin
dYdX
ENS
LayerZero
The Biggest Airdrops. Sources: Bitget, BeInCrypto
Airdrop geoblocking methods vary, from simple IP restrictions (which users can bypass with a VPN) to strict identity verification (KYC) requirements, which completely block U.S. residents from participating.
Comparing geoblocked airdrops to open distributions
To measure the impact of geoblocking, researchers applied a Geoblocking Adjustment Factor to estimate the percentage of U.S. users unable to claim airdrops.
For comparison, Uniswap (UNI) was examined as a major airdrop that did not impose geoblocking—becoming one of the largest airdrops in crypto history.
Additional analysis from CoinGecko, which used data from 21 airdrops and peak token prices, suggests that U.S. users may have lost as much as $5.02 billion in total potential earnings.
Regulatory uncertainty drives crypto innovation abroad
The report also references Tether, which earned $6.2 billion in profit in 2024 but, being registered outside the U.S., did not pay U.S. taxes.
According to analysts, this case highlights how regulatory uncertainty drives crypto companies to expand outside the U.S., leading to potential economic losses for the country.
As we wrote, cryptocurrency airdrops are a way to distribute tokens to users for free in order to attract attention to a project, increase its audience, and create an active community. Blockchain platform developers use airdrops as a marketing tool and to stimulate interest from investors and users. Participation usually requires simple actions: subscribing to social networks, registering on the platform, or completing certain tasks.
