Pat the shrimp very dry with paper towels. In a shallow dish, combine flour and old bay seasoning. In a second dish, beat the eggs. In a third dish, mix panko breadcrumbs, garlic powder, smoked paprika, cayenne pepper, and salt.
Toss the shrimp in the seasoned flour, shake off the excess, dip in egg, and then press into the panko mixture until fully coated.
Preheat the air fryer to 400°F (200°C) for 3 minutes. Spray the basket with cooking spray.
Arrange the breaded shrimp in a single layer in the air fryer basket. Spray the tops generously with cooking spray.
Cook at 400°F for 6 to 8 minutes, shaking the basket once halfway through, until the shrimp are golden, crispy, and cooked through.
Serve immediately with cocktail sauce and lemon wedges.