Coinbase Disables NFT Transfers on iOS App as Apple Wants 30% Cut

Coinbase (Nasdaq: COIN) is the latest victim of Apple's stringent payment policy that forced the crypto platform to remove non-fungible token (NFT) transfers from its Wallet app on iOS.

In a tweet on Thursday, Coinbase confirmed that the technology giant blocked its "last app release" until the crypto exchange disabled the feature. The iPhone maker wants 30 percent of the gas fees associated with all NFT transfers through in-app purchases.

"Apple's claim is that the gas fees required to send NFTs need to be paid through their In-App Purchase system, so that they can collect 30% of the gas fee," Coinbase tweeted. It is in line with Apple's existing policy of receiving a hefty cut from all in-app purchases.

Apple’s claim is that the gas fees required to send NFTs need to be paid through their In-App Purchase system, so that they can collect 30% of the gas fee.

— Coinbase Wallet (@CoinbaseWallet) December 1, 2022

However, gas prices are paid on the blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term, and Apple does not have the infrastructure to receive such payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term. The technology giant only accepts fiat payments.

"For anyone who understands how NFTs and blockchains 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," Coinbase added. "This is akin to Apple trying to take a cut of fees for every email that gets sent over open Internet protocols."

Interestingly, neither Coinbase nor the persons involved in the NFT transfers receive any gas fees. The gas fees are not fixed and are awarded to the miners in the decentralized network who validate the transactions. Apple did not explain how its infrastructure can take a cut from such transactions or even its policy around them.

Apple's Policy Around NFTs

"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 purchase," Apple explains in a section of its App Store review guidelines.

Coinbase explained that Apple's attempt to take a cut from blockchain transactions is like "trying to take a cut of fees for every email that gets sent over open Internet protocols."

"Apple has introduced new policies to protect their profits at the expense of consumer investment in NFTs and developer innovation across the crypto ecosystem," the crypto platform added.

Apple held more than 17 percent of the global smartphone market. The price of iPhones also indicates that most iPhone users' socio-economic conditions are on an upward trajectory.

Further, the tech giant controls the entire ecosystem of its iPhone. The phone maker allows apps only to be installed from its App Store and does not allow downloads from third parties. Several other major tech companies, including Spotify and 'Fortnite' maker Epic Games, challenged Apple's policy, calling it a "monopoly."

In September, Apple created havoc in the forex and contracts for differences (CFDs) industry by banning two MetaQuotes Software's apps, MetaTrader 4 and MetaTrader 5. These are third-party trading platforms used by several brokers to offer trading services. Though Apple did not specify the reason behind the delisting, it is understood that the decision was taken as many fraudulent platforms are using MT4 and MT5 platforms.