Coinbase is now in dispute with Apple over commissions on NFT transactions

When a non-fungible token or NFT is sold on the aftermarket, there are a few different parties that make money. The seller of the NFT gets paid, the original creator of the NFT part gets a license fee, and the NFT platform charges a transaction fee.

Now there is one more party that would like to get paid for these NFT trades: Apple.

According to Coinbase, the largest crypto exchange in the US, NFTs are currently being deployed can not traded in the Coinbase Wallet app. The company says Apple is currently blocking the latest version of the app. Why? Because Apple wants Coinbase to either remove the feature or implement the transactions as part of Apple’s in-app purchase system. This way, Apple gets its 30 percent cut from every transaction.

“Customers are currently unable to send NFTs on Coinbase Wallet iOS as Apple has blocked our latest app version, claiming that the network fees required to transfer NFTs between wallets must be paid through their in-app purchase system” , a Coinbase spokesperson said in a statement provided to Mashable. “Anyone who understands how NFTs and blockchains work knows that this is not possible. Apple’s proprietary in-app purchase system does not support cryptography, so even if we had tried and submitted a request to Apple to change this policy, we could not comply.”

Basically, when a user participates in an NFT transaction, they have to pay what is called a “gas fee”. Gas fees are basically blockchain transaction fees, and the amount depends on how busy each network is at the time. The busier the network, the higher the fee. The fee is paid to those who validate the blocks on the blockchain. Since those gas fees don’t go to Coinbase, Apple’s 30 percent wouldn’t come from Coinbase’s cut. This would likely result in users paying gas fees via an app purchased from the App Store having to pay more for in-app NFT transactions than outside of the App Store ecosystem.

According to Apple, the company recently updated its policy on NFT transactions, which is why the latest version of Coinbase was the first to be blocked. Although Coinbase appears to be the first major crypto platform to go public with the issue, Apple says this rule will apply to all developers.

Apple pointed to Mashable specific rule in his App Store Review Guidelines, which now read:

“If you want to unlock features or functionality within your app (for example: subscriptions, in-game currency, game levels, access to premium content or unlock a full version), you must use in-app purchases. Apps must not have their own mechanisms use to unlock content or features, such as license keys… cryptocurrencies and cryptocurrency wallets, etc. Apps and their metadata must not contain buttons, external links or other calls-to-action that direct customers to purchase mechanisms other than in-app purchase. “

Apple indicated that it will be working with developers affected by this update as the NFT space is fairly new.

The 30 percent commission that Apple charges developers for all App Store purchases has caused problems before. Fortnite developer Epic Games has denied with Apple about the 30 percent cut, which resulted in the game being removed from the App Store by Apple. Most recently Elon Musk complained that Twitter had to pay Apple 30 percent of the $8 Twitter Blue subscription.

For its part, Coinbase is striking a diplomatic tone. “We hope this was an oversight and we look forward to working with Apple to find a solution that will benefit Apple and Coinbase customers,” the statement said.

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