US crypto investors miss out on billions in airdrop profits due to restrictive regulations, report finds

• U.S. traders have missed out on $1.84B–$2.64B in airdrops from 2020 to 2024
• Government lost an estimated $525M–$1.38B in potential tax revenue
• Geopolitical restrictions and regulatory uncertainty continue to block U.S. users from lucrative airdrops

Crypto airdrops have generated huge profits, but just not for U.S. users. DragonFly’s new report reveals how US investors missed out on nearly $2.64 billion in potential airdrop gains from 2020 to 2024 due to geopolitical bans. The research showed how strict regulations and compliance barriers have prevented U.S. users from taking part in major token distributions, leaving them unable to benefit from free crypto windfalls.  

This regulatory lack of clarity not only affects individual traders financially, but even the U.S. government is missing out on roughly $525 million to $1.38 billion in tax revenue from geo-blocked airdrops. 

Not to forget the loss of corporate tax revenue from offshore migration. One such example is Tether, which reported a $6.2 billion profit in 2024, surpassing even BlackRock. If it was U.S.-based, this would generate an estimated $1.3 billion in federal corporate tax and $316 million in state taxes. The potential tax loss from Tether’s offshore status alone is roughly $1.6 billion annually. 

“The cumulative impact of multiple high-revenue crypto firms operating offshore represents a significant lost revenue source for the U.S. government,” DragonFly noted.

As a result, U.S. traders have been forced to seek offshore platforms and use VPNs, exposing them to compliance risks and potential legal issues.

Related: Buterin’s Take on Airdrops: A Use Case for Blockchain Identity

Experts Advocate for “Safe Harbor” Airdrop Rules

To address these challenges, experts suggest rules to protect airdrops, which are not intended for fundraising, as current regulations misclassify them as investment offerings, thus restricting their adoption.

A proposed “safe harbor framework” would allow airdrops meant for community engagement and usability—rather than financial gain—to operate without heavy regulatory burdens. Key recommendations include:

• Issuers must disclose tokenomics, governance mechanisms, and potential risks.
• Strict prohibitions against fraudulent activities and insider trading.
• No caps on user numbers or total airdrop value, thus encouraging broad access:
• A mandatory three-month lock-up for insiders to prevent price manipulation.
• Tokens must have real-world use cases at launch.

Related: Bitget Partners with DOGS Project to Bring Zero-Fee Airdrops to Users

By establishing clear regulatory rules, experts believe the U.S. can restore access to airdrops while protecting investors and encouraging innovation. Without action, experts warn that crypto startups will continue to sideline U.S. users, further hurting the nation’s position in the global digital economy.