Geoblocking Policies in Cryptocurrency Airdrops May Have Cost Americans Up to $2.6B in Potential Earnings

output:input: Bitcoin (BTC) price prediction: The Bitcoin (BTC) price could reach $100,000 by the end of 2024, according to a new report released by the cryptocurrency exchange Bybit.

Geoblocking policies in cryptocurrency airdrops may have cost Americans up to $2.64 billion in potential earnings from 2020 to 2024, a report released Monday revealed.

What Happened: Dragonfly, a cryptocurrency-focused venture capital firm, published a report detailing the financial impact of geoblocking policies on U.S. users in airdrops- a marketing stunt that involved sending free tokens to users to promote a project and drive engagement.

Out of the 12 airdrops analyzed, 11 used geoblockers to prevent U.S. residents from participating or receiving tokens. Due to these geographical restrictions, U.S. users may have missed out on anywhere between $1.84 billion and $2.64 billion in potential revenue from 2020-2024.

Moreover, the Treasury Department may have missed federal tax revenue of up to $1.38 billion due to geoblocked airdrop income.

The report included analysis of token airdrops such as ApeCoin (APE), linked to the Bored Ape Yacht Club NFT, in addition to Arbitrum (ARB) and EigenLayer (EIGEN).

EigenLayer’s airdrop, which began in March 2024, distributed approximately $1.5 billion in EIGEN tokens to users who had previously engaged with Arbitrum, Balancer, and Frax, among other protocols.

The analysis estimated that around 2.2 million U.S. users may have missed out on receiving airdrop tokens, with an average estimated value of $1,200 per user.

EigenLayer’s airdrop, in particular, had a minimum participation requirement of 20 EigenChain blocks, which translates to about 18 hours, to be eligible for receiving EIGEN tokens.

Despite the efforts of the U.S. Congress to advance a comprehensive cryptocurrency bill this year, the legislation stalled due to disagreements among lawmakers concerning the inclusion of a provision that would expressly permit U.S. users to participate in cryptocurrency airdrops.

Why It Matters: The SEC’s position on cryptocurrency airdrops has been ambiguous, with non-binding guidance in 2019 indicating that an airdrop “may constitute” a sale or distribution of securities.

The agency hasn’t issued a comprehensive regulation, specifically addressing airdrops. To be on the safer side, many cryptocurrency projects started blocking U.S. residents from accessing airdrops.

A few prominent members of Congress wrote to former SEC Chair Gary Gensler in September, pressing for clarity on the regulatory stance.

Over the years, scammers have exploited the allure of airdrops or free tokens to con unsuspecting users. The modus operandi involves creating fake airdrop campaigns, which impersonate legitimate projects, and then using deceptive tactics to trick users into connecting their wallets to phishing websites.