Abstract
Worldwide regulatory restrictions have pushed crypto entrepreneurs to take creative and novel approaches in their struggle to create viable user networks for new tokens. One of the most interesting vehicles for dispersing tokens is the ‘airdrop’, a process by which a developer essentially ‘gives away’ tokens. The developers’ motives in these airdrops are typically not completely altruistic. Instead, the goal is to increase the ‘buzz’ about new forms of crypto, and to encourage recipients to voluntarily promote the token that they now also own. The regulatory reaction to this technique has been mixed. A few nations, most notably China, have banned airdrops. Most other countries, however, have been less drastic and more ambiguous in their responses. This article lays out some of the current reactions to crypto airdrops and explains why it generally does not make sense not to treat them as involving the distribution of a security. Only where the airdrop crosses the line and requires more than a token effort (no pun intended) is regulation warranted. Where that line should be drawn is left to individual nations.
Recommended Citation
Goforth, Carol R.
(2019)
"It’s Raining Crypto: The Need for Regulatory
Clarification When it Comes to Airdrops,"
Indian Journal of Law and Technology: Vol. 15:
Iss.
2, Article 3.
DOI: 10.55496/OJXJ5973
Available at:
https://repository.nls.ac.in/ijlt/vol15/iss2/3
Digital Object Identifier (DOI)
10.55496/OJXJ5973
