A crypto airdrop is a distribution of tokens to many wallet addresses at once. Projects usually do it to reward early users or to spread ownership of a new token, and the tokens are often free to the recipient. "Free" has limits, though. In some countries the tokens can be taxable when they arrive, the rules on who qualifies are set by each project and can be strict, and unsolicited tokens are a common way to steal from wallets. The US tax agency defines an airdrop as "a distribution of cryptocurrency to multiple taxpayers' distributed ledger addresses" (IRS virtual currency FAQs).
The two kinds of airdrop
Retroactive airdrops
A retroactive airdrop rewards activity that has already happened: using a network or protocol before it had a token, bridging funds, or transacting regularly. The project records eligibility at a snapshot, and recipients usually learn about the airdrop after the snapshot is taken. You can't do anything in advance to qualify.
Arbitrum's ARB distribution, documented by the Arbitrum Foundation, is a clear example:
- Snapshot: block 58642080 on Arbitrum One, dated 6 February 2023.
- Claim window: 23 March 2023 to 24 September 2023. The Foundation states that ARB "is no longer claimable."
- Size: 11.62% of the initial supply, or 1.162 billion tokens, went to user wallets.
- Scoring: points for qualifying actions, such as bridging funds, transacting across several months, and passing transaction-count or value thresholds. Each action earned at most one point and the total was capped at 15. Addresses with fewer than three points received nothing.
Task-based campaigns
In a task-based campaign, the project publishes a list of actions before its token exists. Typical tasks are following accounts, making on-chain transactions or holding a balance. Unlike a retroactive drop, you can see the criteria before you act. A completed checklist is not a promise, though: the project decides afterwards who qualifies and how much each wallet gets.
What disqualifies a wallet
Each project writes its own rules, so there is no universal list. The published Arbitrum criteria show the kind of filters projects use against "Sybil" activity, where one person runs many wallets to collect more tokens:
- One point was deducted if all of a wallet's transactions happened within a 48-hour period.
- One point was deducted if a wallet held less than 0.005 ETH and had interacted with no more than one smart contract.
- Addresses flagged as Sybil in an earlier bounty programme run by the Hop protocol were disqualified.
Wallets that do only the minimum, all at once, are the ones these filters catch. Treat an airdrop as a possible side effect of real use, not as income to plan around.
Is this airdrop claim safe to touch?
Answer a few questions about tokens or a claim offer you received to see which warning signs from this article apply.
Did the tokens appear in your wallet from a project you never used?
- Yes → Don't interact with the tokens
- No, I used this project → next question
Does the claim ask for your recovery phrase or private keys?
- Yes → Treat it as a scam
- No → next question
Does it ask you to send funds first to unlock or double a larger amount?
- Yes → Treat it as a scam
- No → next question
Did you reach the claim site through the token itself, such as its name, metadata or a memo link?
Have you confirmed the claim through the project's official channels?
Unsolicited tokens from a project you never used match the scam pattern Ethereum.org describes: approving the 'claim' transaction can compromise your account. Leave them alone.
Ethereum.org says never to share your recovery phrase or private keys for any reason, and that giveaways asking you to send funds first are always scams. Do not continue.
A link carried by the token itself is the method in the FBI's June 2025 alert on airdropped tokens. Find the project's official channels on your own and confirm the offer comes from the project before you approve anything or enter any information.
None of the signs in this article apply. That does not prove the claim is safe, and in some countries the tokens can be taxable income once you can move or sell them.
This checks only the warning signs listed in the article; it cannot verify a specific token, site or project, and it is not security, tax or legal advice.
How airdrops are taxed
The rules differ by country. Two examples from tax authority guidance:
United States
- Timing: under the IRS FAQs and Revenue Ruling 2019-24, you have taxable income from an airdrop in the year you receive the tokens, as long as you have "dominion and control." That means you are able to move, sell or otherwise dispose of them.
- Amount: the income is ordinary income equal to the tokens' fair market value when you receive them, which is generally when the airdrop is recorded on the ledger.
- Cost basis: your basis in the tokens is the amount you counted as income.
- Dates covered: the IRS says these FAQs generally apply to transactions completed before 1 January 2025.
United Kingdom
- Income Tax: HMRC's Cryptoassets Manual says Income Tax "will not always apply" to airdropped tokens received personally. It may not apply when tokens arrive without the recipient doing anything in return. Airdrops "provided in return for, or in expectation of, a service" are taxed as miscellaneous income or as receipts of a trade.
- Capital Gains Tax: selling or otherwise disposing of airdropped tokens later may still produce a chargeable gain, even if no Income Tax was due when they arrived.
How regulators view "free" tokens
Calling a token free does not take it outside securities or crypto-asset rules.
- United States: in August 2018, the SEC settled charges against Tomahawk Exploration LLC. The company had issued tokens through a "Bounty Program" in exchange for online promotional services. The SEC found violations of the registration and antifraud provisions of federal securities laws.
- European Union: Article 4(3)(a) of the Markets in Crypto-Assets Regulation (MiCA), Regulation (EU) 2023/1114, exempts offers of crypto-assets that are "offered for free" from the Title II white-paper rules. A token does not count as free if recipients must provide personal data to the offeror. It also does not count as free if the offeror receives "any fees, commissions, or monetary or non-monetary benefits" in exchange.
The scam version
Unsolicited tokens are one of the most common ways people get drained. Ethereum.org describes the pattern: a scam project airdrops a token or NFT into your wallet, and when you approve the "claim" transaction, it compromises your account.
On 3 June 2025 the FBI's Internet Crime Complaint Center (alert I-060325-PSA) warned about a version aimed at Hedera Hashgraph wallet users. Criminals put a link to a third-party website in the memo field of an airdropped token. The information victims entered on that site let the criminals steal the cryptocurrency in their wallets.
Signs that a claim is a scam:
- It asks for your recovery phrase. Ethereum.org's rule: "Never, for any reason, share your recovery phrase or private keys!"
- It asks you to send funds first to unlock or double a larger amount. Ethereum.org says giveaways like this "are always scams."
- It points you to a site through the token itself, in its name, metadata or a memo link. Check any claim through the project's official channels instead. The FBI advises confirming that an offer comes from the provider before accepting it or giving any information.
- Tokens appear from a project you never used. Don't interact with them.
Limitations: this article covers US, UK and EU rules only. Tax treatment and eligibility rules vary by country and by project. Nothing here is tax, legal or investment advice.
