Coinbase is now arguing with Apple over commissions on NFT transactions

When a non-fungible token or NFT is sold on the secondary market, there are a few different parties who 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 is one more party that wants to get paid for these NFT trades: Apple.

According to Coinbase, the largest crypto exchange in the US, NFTs are currently can not traded in the Coinbase Wallet app. The company says Apple is currently blocking the final 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 are currently unable to send NFTs on Coinbase Wallet iOS because Apple blocked our latest app release, claiming that the network fees required to transfer NFTs between wallets must be paid through their In-App Purchase system,” said a Coinbase spokesperson said in a statement. 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 could not comply with this even if we tried and we have submitted an application for Apple to amend these guidelines.”

Basically, when a user participates in an NFT transaction, they must 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 will likely end up requiring users paying gas taxes through an app purchased on the App Store to pay more for in-app NFT transactions than they would outside the App Store ecosystem.

According to Apple, the company recently updated its policies around NFT transactions, which is why Coinbase’s latest release was the first to be blocked. While 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 Mashable to specific rule in the App Store Review Policy which now reads:

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

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 problems before. Fortnite developer Epic Games has feud with Apple exceeding the 30 percent cut, resulting 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, strikes 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,” the statement said.