Americans Miss Out on Up to $2.6B in Crypto Airdrop Rewards Due to Geoblocking: Report

Highlights:

• Geoblocking policies in cryptocurrency airdrops potentially cost U.S. users up to $2.64 billion.
• Dragonfly’s study found 920,000 to 5.2 million U.S. users blocked by geoblocking.
• Geoblocked airdrops caused U.S. tax losses between $525 million and $1.38 billion.

A recent report by crypto venture capital firm Dragonfly reveals that geoblocking policies in cryptocurrency airdrops have significantly impacted U.S. users. Geoblocking restricts access based on geographic location, often due to regulatory concerns. From 2020 to 2024, these policies have potentially cost American users between $1.84 billion and $2.64 billion in unclaimed airdrop tokens. 

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The right approach to airdrops:

✔️ Clear frameworks, not enforcement actions
✔️ Tax clarity, not confusion
✔️ Registration pathways, not forced geoblocking

The wrong approach? Status quo in U.S.

Dragonfly’s report & @hildobby_ data quantifies impact👇https://t.co/2TLlLeqv5m

— Jessica Furr (@JessicaFurr305) March 11, 2025

Geoblocking in Airdrops Costs U.S. Users and Tax Revenue

Dragonfly’s research analyzed 12 cryptocurrency airdrops, including Uniswap and 1inch. Among them, 11 airdrops restricted U.S. IP addresses. The study found that between 920,000 and 5.2 million active American users were affected by these blocks. This represents 5–10% of the 18.4 to 52.3 million U.S. cryptocurrency holders impacted by geoblocking last year

Around 22–24% of all active cryptocurrency addresses belong to U.S. residents. Dragonfly’s sample shows that the total value of the 11 airdrops was about $7.16 billion. Globally, around 1.9 million people claimed these airdrops, with each eligible wallet receiving an average of $4,600.

CoinGecko gathered data on 21 airdrops, which Dragonfly referred to. This data suggests the missed airdrop value could be as high as $5.02 billion. Some users may have accessed these airdrops using VPNs. However, a large number of recipients likely never claimed their tokens.

The report said:

 “The economic repercussions of geoblocking on U.S. users are profound, with significant revenue losses that affect both the individual claimers and the broader economic landscape.”

CoinGecko estimates that geo-blocked airdrops led to a federal income tax loss of $418 million to $1.1 billion from 2020 to 2024. State tax losses are estimated between $107 million and $284 million. In total, the lost tax revenue ranges from $525 million to $1.38 billion.

The shift of cryptocurrency operations abroad has significantly impacted U.S. tax revenue. The report highlights Tether as an example. By moving its headquarters to El Salvador, companies like Tether may have cost the U.S. around $1.3 billion in federal corporate taxes and $316 million in state taxes.

Need for Regulatory Clarity in Crypto Airdrops

To address this, the firm shared recommendations on how regulators can work with the industry to improve crypto airdrop rules. It sees airdrops as an “important strategic tool to create excitement and build awareness around a project.” The suggestions include treating airdrops like credit card rewards for taxes, protecting past airdrops and their protocols, and keeping Congress engaged with the crypto industry.

Recently, regulators have shown more willingness to resolve issues with crypto companies. This is evident in the U.S. Securities and Exchange Commission dropping several lawsuits and investigations under President Trump. However, it is still unclear whether token airdrops will receive regulatory clarity. “To unlock the full potential of airdrops while safeguarding user and market integrity, we call for regulatory clarity and tailored frameworks,” writes Dragonfly. 

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