Why U.S. Residents Are Crying Over $2.6B in Geoblocked Airdrops! 😱💸

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What to know:

  • Ah, the SEC! Their regulation by enforcement tactics have turned crypto projects into geoblocking ninjas, keeping U.S. users at bay from airdrops.
  • According to the illustrious Dragonfly, airdrops have collectively generated a staggering $7.16 billion from a mere 11 projects. Talk about a cash cow! 🐄💰
  • But wait! As much as $2.64 billion in potential revenue was lost to U.S. users due to this geoblocking fiasco from 2020 to 2024. Ouch! 😬

In a world where draconian crypto regulations reign supreme, U.S. citizens have been left out in the cold, missing out on airdrops — those delightful little gifts of free tokens meant to reward loyal communities. The cost? A jaw-dropping $2.6 billion in potential revenue and a staggering $1.4 billion in lost tax income for the government over the past four years, as revealed by the ever-so-reliable venture capital firm, Dragonfly.

In a report that could make even the most stoic of readers chuckle, the digital assets-focused firm unveiled a treasure trove of figures, based on a sample of 11 major airdrops that have generated over $7.16 billion since 2020. Among the glittering names are 1inch, EigenLayer, Arbitrum, Athena, Optimism, and LayerZero. The average median claim per eligible address? A delightful $4,562. Who knew free money could be so lucrative? 💸✨

“We realized there’s a real need for data that can actually show the effect of regulation by enforcement and how those policies impact individuals, the overall economy, and the U.S. government,” said Dragonfly’s associate general counsel, Jessica Furr, in an interview that surely had her sipping a strong cup of coffee. “So we decided to focus on airdrops as a discrete use case from crypto to see how the present policies may have created some negative externalities.”

The report estimates that between $1.84 billion and $2.64 billion in potential revenue was lost to U.S. users from 2020 to 2024 due to geoblocking — a technique akin to building a digital Berlin Wall to keep U.S. IP addresses from frolicking in the fields of crypto rewards.

Years of regulatory uncertainty in the U.S. have cast a long shadow over crypto innovation, sending startups scurrying off-shore like frightened mice, while larger companies have found themselves entangled in a web of subpoenas and lawsuits with regulators. What a tangled web we weave! 🕸️

Not just blockchain builders, but also venture capital firms like Union Square Ventures and Andreessen Horowitz have felt the SEC’s icy grip for daring to invest in platforms like Uniswap, which the Dragonfly report cites as the last major airdrop not to be geoblocked in the U.S. A true relic of a bygone era! 🏺

Dragonfly isn’t alone in its lamentations over U.S. geoblocking; New York City-based Variant Fund also produced a report lamenting how crypto firms are left with no choice but to wield the blunt tool of exclusion, fearing the wrath of regulators. “If the rules are not clear about what projects can do, it becomes better to just geoblock to avoid getting into trouble,” Furr said, with a hint of sarcasm. “Being pulled into an expensive litigation where you have to defend yourself can shut projects down because they can’t foot that bill.”

Almost a quarter of all active crypto addresses worldwide are controlled by U.S. residents, and the number of users in America geoblocked since 2020 amounts to a staggering 5.2 million, the report says. This figure conveniently excludes those crafty individuals who resort to using virtual private networks (VPNs) to outsmart geofencing measures. Clever, aren’t they? 🕵️‍♂️

Dragonfly also arrived at an estimated tax revenue lost due to geoblocked airdrop income between 2020 and 2024, which it pegs

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2025-03-11 16:04