Coinbase Wallet has accused Apple of forcing it to remove an NFT transfer feature from its iOS app. The move comes following the tech giant’s recent decision to levy a 30% commission on all crypto transactions made via apps on its devices.
Cryptocurrency exchange Coinbase accuses Apple of forcing it to remove a feature from its app. In the latest update, Coinbase Wallet – the company’s self-custody crypto wallet – introduced a service that would allow users to transfer non-fungible tokens (NFTs) over their iOS devices. However, Apple blocked the update and threatened to remove the app from its App Store for failing to comply with the company’s policies regarding crypto assets, according to a Twitter thread by Coinbase.
This was because in October the tech giant updated its App Store review guidelines by taking NFTs into account. Apple put a 30% tax levy on all apps that support NFT trading or in-app purchases using digital tokens, forcing them to offer the services through Apple’s own In-App Purchasing system. Guidelines under Section 3.1.1 In-App Purchases read;
“Apps may use in-app purchase to sell and sell services related to non-fungible tokens (NFTs), such as minting, listing, and transferring. Apps may allow users to view their own NFTs, provided that NFT ownership does not unlock features or functionality within the app. Apps may allow users to browse NFT collections owned by others, provided that the apps may not include buttons, external links, or other calls to action that direct customers to purchasing mechanisms other than in-app purchases.”
Coinbase claims that it was asked to conduct all NFT transactions through Apple’s In-App Purchase system so that the tech behemoth can collect 30% of the gas fees paid as network charges. For Apple to take a cut from all crypto transactions, it first needs to integrate a Web3 payment gateway on its operating systems, which the company’s iOS and macOS devices currently do not support.
“For anyone who understands how NFTs and blockchain work, this is clearly not possible. Apple’s proprietary In-App Purchase system does not support crypto so we couldn’t comply even if we tried. This is akin to Apple trying to take a cut of fees for every email that gets sent over open Internet protocols,” said Coinbase.
Crypto gas fee do not go to the company or individuals conducting the NFT transaction, instead it is a charge paid to the network (eg. Ethereum and Cardano) that is processing the transaction. The fees are paid in native crypto tokens of the blockchain ecosystem on which the NFTs are deployed, for example, a gas fee is charged in ETH for NFTs on the Ethereum network. Rates of the fee also change from time to time depending on various factors like the price of the particular cryptocurrency or network traffic.
While popular digital collectibles marketplaces like OpenSea, Raible, and Magic Eden charge a mere 2.5% as commission fees for NFT transactions, Apple’s decision to implement a 30% commission has angered the wider crypto community. Due to the company’s strict and insensible policy, many crypto service providers have limited features on their iOS apps and are asking users to purchase cryptocurrencies and NFTs through websites to evade the high fees.
Crypto firms and investors are criticizing the company for causing hindrance to innovation and growth in the industry and slowing down the adoption of crypto-based products among mainstream consumers.