A new report reveals that geoblocking US users from airdrops have denied Americans billions of dollars.
In a recent report, venture capital fund Dragonfly disclosed that geoblocking policies hindered US crypto users from 2020-24 airdrops. The report attributes the regulatory concerns of various projects to potentially missing out on multi-billion-dollar revenue.
At least $1.8B Loss
The disclosure is part of the State of Airdrops 2025 following the analysis of 12 distinct Ethereum-based airdrops. The choice is ideal, given its popularity as a reward mechanic granting tokens to users of historical and current protocols.
Dragonfly revealed that 11 projects deployed geoblocking restrictions that excluded US residents from receiving the tokens on the dozen large-scale airdrops analyzed. The firm estimates that Americans could not claim tokens worth $1.84 to $2.64 billion from those projects owing to the location restrictions.
US Misses Out on Key Airdrops
The Dragonfly outlines that understanding the scale of Americans’ participation and the financial impact of restrictive policies informs future regulatory decisions. The firms reiterated their desire to quantify US residents’ implications from the geoblocking policies on the crypto airdrops. This informs the basis of assessing the broader economic consequences of the restrictive policies.
The scope of the report evaluates sizeable Ethereum airdrop involving Bored Ape Yacht Club-affiliated ApenCoin (APE), Ethereum Name Services (ENS), EigenLayer (EIGEN), and Arbitrum (ARB). The venture fund firm decries that American crypto users suffered heavy losses even from a relatively small sample.
A previous analysis by CoinGecko from a larger airdrop data set comprising 21 projects illustrates over $5.02 billion loss. The analysis showed that though some users deployed VPNs to overcome the blocks, CoinGecko illustrated that many would-be beneficiaries hardly claimed the token shares.
Economic Repercussions from Geoblocking
The CoinGecko report asserts that the economic repercussions from geoblocking have been profound. The substantial revenue losses extend beyond the harm to the individual claimers as the broader financial landscape is greatly affected.
The Dragonfly report illustrates that the broader economic landscape portrays the state and federal governments’ missed on sizeable tax revenues. The report uses the individual tax rates to approximate that the federal tax revenue loss could scale to $1.1 billion. Dragonfly shows the states missed out on $284 million in tax revenue.
Dragonfly urges rectification of the situation, suggesting regulators work with the crypto industry to find suitable solutions to the airdrops. The firm terms the initiative as a strategic tool toward awareness and excitement for the project.
Dragonfly recommends aligning the airdrops with the tax status of the credit card reward points. As the industry engages Congress, this will offer a safe harbor to the previously issued airdrops and respective protocols.
Case for Regulatory Clarity
The report acknowledges recent developments where the regulators are progressively working towards resolving existing legal battles with the crypto companies. The report highlights the US Securities and Exchange Commission (SEC) move to drop charges and investigations leveled against Uniswap, OpenSea, Consensys, and Coinbase. This coincides with the pro-crypto agenda of the President Donald Trump administration.
It is uncertain whether the pending drafts factor the token airdrops, particularly with the stablecoin legislation dubbed GENIUS Act, which is set for a vote on Thursday. Nonetheless, the revelations of huge losses to individuals and tax authorities are monumental for the legislators to overlook.
Dragonfly supports the quest for regulatory clarity and tailored frameworks to enable Americans to unlock the full potential of crypto airdrops without compromising market and user integrity.
Embracing such regulatory modernization could nurture a thriving blockchain ecosystem. This could align perfectly with the Trump administration’s goal of transforming the US into global crypto capital. Notably, eliminating regulatory ambiguity will drive technological advancement, competitiveness, and economic growth.
