Dragonfly estimates that U.S. crypto traders missed out on up to $2.6 billion in airdrop claims. | Credit: Behcet Alkan/Anadolu via Getty Images.
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Key Takeaways
Due to regulatory restrictions, U.S. crypto traders lost an estimated $2 billion to $5 billion in potential airdrop revenue.
The geoblocking of airdrops also cost the government billions in lost tax revenue.
A new report analyzed 12 major airdrop projects between 2020 and 2024.
A new report from crypto investment firm Dragonfly finds that the U.S. crypto industry has been cut off from billions in potential airdrop revenue as regulatory uncertainty forces projects to exclude American traders.
While users in other countries have profited from token giveaways, U.S. participants have largely been sidelined over fears of legal backlash from the Securities and Exchange Commission (SEC).
Airdrops, often used by crypto startups to distribute free tokens in an effort to build adoption and incentivize participation, have become a crucial marketing tool for blockchain projects.
However, with increasing scrutiny from the SEC, many projects have opted to exclude U.S.-based traders entirely.
Dragonfly estimates that, due to regulatory restrictions, U.S. crypto traders missed out on up to $2.6 billion in airdrop claims between 2020 and 2024.
The analysis covers 12 projects, 11 of which blocked American users over concerns about potential securities law violations.
US traders lost nearly $2.5 billion in airdrop claims. Source: Dragonfly.
Expanding the scope, Dragonfly estimated that total lost revenue for American traders may have reached $5 billion when factoring in a broader sample of geo-blocked airdrops.
The report found that between 920,000 and 5.2 million active U.S. crypto traders were barred from claiming tokens in 2024 alone.
These restrictions not only prevented traders from accessing billions in free tokens but also limited their participation in emerging blockchain ecosystems.
Interestingly, the financial impact of airdrop bans wasn’t limited to traders; federal authorities were also affected.
Federal tax revenue losses are estimated between $418 million and $1.1 billion, with state taxes accounting for another $107 million to $284 million.
For instance, if Tether, which reported $6.2 billion in revenue in 2024, were fully taxed under U.S. laws, it could have paid roughly $1.3 billion in federal corporate taxes and $316 million in state taxes.
Instead, its offshore incorporation shields it from U.S. taxation, mirroring a broader industry shift away from the American market.
Will Trump’s Administration Change the Landscape?
While crypto airdrops are not explicitly illegal, the SEC’s aggressive approach has deterred projects from including U.S. traders.
This has led to growing frustration within the industry, with calls for clearer regulations that would allow crypto businesses to operate domestically without fear of legal repercussions.
With Donald Trump back in office, some industry players are hopeful that the regulatory climate will shift.
His administration has already signaled a more business-friendly stance toward crypto, raising expectations that regulatory barriers—including those affecting airdrops—may be reevaluated.
For now, however, U.S. traders remain locked out of lucrative opportunities while crypto companies and their tax revenues continue flowing offshore.
Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.
His coverage spans major industry events, including the high-profile collapses of FTX, Three Arrows Capital (3AC), and LUNA, offering readers insightful analyses of their regulatory and market implications. Prashant’s technical background enables him to bridge the gap between intricate blockchain technology and its real-world applications, making his work accessible to novices and experts.
Beyond his professional pursuits, Prashant is an avid music enthusiast, often exploring diverse genres to unwind. A sports lover, he has a particular passion for cricket and frequently engages in discussions about the game. His multifaceted interests and sharp journalistic instincts make him a valuable contributor to CCN, where he continues shaping the crypto landscape's narrative.
