US investors missed out on billions in airdrops, according to crypto VC firm

US regulators’ crypto crackdown has outgo the state fractional a cardinal successful foregone taxation gross and its residents billions much successful unclaimed, airdropped tokens, according to a caller investigation from task steadfast Dragonfly.

Wary of inviting a suit from the Securities and Exchange Commission, galore crypto firms person attempted to prevent US-based users from claiming airdropped tokens.

That’s due to the fact that the SEC has suggested definite airdropped tokens are securities and truthful taxable to the aforesaid registration and disclosure requirements that use to stocks and bonds. At slightest 1 crypto company, Hydrogen, was sued connected those grounds, and crypto exchanges person spent hundreds of millions of dollars warring allegations they offered US investors unregistered securities.

Airdrops are 1 of respective ways that crypto projects administer recently issued tokens, typically to reward aboriginal and progressive users.

Accounting for post-airdrop gains successful token prices, the 5 largest airdrops of 2024 dispersed much than $20 cardinal successful crypto, according to 1 estimate.

“These figures item the broader economical consequences of U.S. regulatory policies that thrust crypto companies abroad,” the report reads.

“The continued exertion of regulatory policies that restrict entree to airdrops and lend to the offshoring of cryptocurrency innovation has led to a important erosion of the U.S. taxation base.”

Looking astatine a illustration of 11 airdrops and blockchain data, the report’s authors recovered betwixt 15% and 44% of claimants were apt based successful the US.

Because those airdrops netted worldwide claimants a combined $7.1 cardinal successful crypto, US users who met each the different eligibility criteria apt missed retired connected astatine slightest $1.8 billion, according to the report.

Because airdropped tokens person been taxed arsenic income, unclaimed tokens person outgo the national authorities astatine slightest $418 cardinal and authorities governments astatine slightest $107 million, according to the report.

“We chose airdrops due to the fact that it’s conscionable 1 discrete usage lawsuit for crypto, due to the fact that it was thing that we could measure,” Jessica Furr, subordinate wide counsel astatine Dragonfly, told DL News.

“[It’s] someplace wherever we could amusement an interaction connected policies and anticipation that adjacent conscionable successful this tiny usage case, you tin consciousness the interaction present to the manufacture astatine large.”

To beryllium sure, crypto skeptics are apt to look askance astatine an investigation produced by 1 of the industry’s astir salient task superior firms. Dragonfly has backed immoderate of the largest protocols successful decentralised finance, including Lido, Ethena, and Aptos.

Moreover, determination were limitations to the study. Dragonfly caput information idiosyncratic Hildebert Moulié, known by his online pseudonym Hildobby, told DL News helium made immoderate assumptions, including the stock of blockchain based-accounts that were apt tally by bots, alternatively than humans, and the efficacy of crypto companies’ geo-blocking.

“Most people, I would say, effort to debar getting themselves successful trouble,” helium said. “But I bash think, of course, immoderate [US investors] did get astir it and claimed regardless.”

In immoderate case, the existent dollar worth of tokens denied US users is apt acold higher than the $1.8 cardinal calculated by Dragonfly. There person been dozens, if not hundreds, of airdrops, and crypto information institution CoinGecko compiled its ain database of 50 airdrops that netted worldwide users a combined $26 billion. Of those, 29 attempted to artifact US-based users.

Moulié lone analysed airdrops connected Ethereum and related blockchains owed to the easiness of analysing information crossed akin blockchains.

“I could person expanded the information acceptable for sure, but I deliberation it was capable to beryllium the constituent that we were trying to make,” helium said — namely, that the US has paid dearly for its attack to crypto.

In immoderate case, that attack is fast-changing, according to Furr.

“Post-January 2025, there’s decidedly a softening of the harsh stance that the agencies person been taking,” she said.

“There’s a batch of truly large speech happening amongst the manufacture and the SEC close present to effort to enactment immoderate rules successful place. And that does see airdrops.”

Recent large airdrops see Berachain’s merchandise of 79 cardinal BERA tokens, which were trading supra $6 Friday, and Hyperliquid’s merchandise of much than $1 cardinal successful HYPE tokens successful November.

Aleks Gilbert is DL News’ DeFi Correspondent based successful New York. You tin interaction him astatine [email protected].