Coinbase is feuding with Apple now 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 piece receives a royalty, and the NFT platform charges a transaction fee.

Now, there’s one more party that would like to get paid on these NFT trades: Apple.

According to Coinbase, the largest crypto exchange in the U.S., NFTs currently cannot be traded in the Coinbase Wallet app. The company says Apple is currently blocking the latest release 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. That way, Apple gets paid its 30 percent cut from each transaction.

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“Customers cannot currently send NFTs on Coinbase Wallet iOS because Apple blocked our last app release, asserting that the network fees required to transfer NFTs between wallets need to be paid through their In-App Purchase system,” said a Coinbase spokesperson in a statement provided to Mashable. “Anyone who understands how NFTs and blockchains work, knows this is not possible. Apple’s proprietary In-App Purchase system does not support crypto so we couldn’t comply even if we tried and we’ve submitted an application for Apple to change these guidelines.”

Basically, when a user takes part in an NFT transaction, they need to pay what is known as a “gas fee.” Gas fees are basically blockchain transaction fees, and the amount depends on how busy the specific 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 out of Coinbase’s cut. This would likely end up requiring users who are paying gas fees through an app purchased in the App Store to pay more for in-app NFT transactions than they would outside the App Store ecosystem.

According to Apple, the company just recently updated its policies surrounding NFT transactions, which is why Coinbase’s most recent release was the first to be blocked. Even though it appears Coinbase is the first major crypto platform to go public with the issue, Apple says that this rule will apply to all developers.

Apple pointed Mashable to the specific rule in its App Store Review Guidelines which now reads:

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

Apple stated that it will work 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 issues before. Fortnite developer Epic Games has feuded with Apple over the 30 percent cut, which resulted in the game being removed by Apple from the App Store. Most recently, Elon Musk complained that Twitter had to pay 30 percent of the $8 Twitter blue subscription to Apple.

Coinbase, for its part, is striking a diplomatic tone. “We hope this was an oversight and we look forward to working with Apple to find a solution that benefits Apple and Coinbase customers,” its statement says.