Coinbase claims that Apple coerced it into removing NFT transfers from its iOS Wallet app. It said on Twitter on Thursday that Apple “blocked our last app update until we removed the feature” because the iPhone manufacturer wants to receive a 30% cut of the blockchain costs associated with an NFT transfer through its in-app purchase mechanism.

For a number of reasons, including the fact that Apple’s system doesn’t handle crypto payments, Coinbase claims that it is difficult to make that happen.

While you can buy digital tokens on some NFT exchanges using conventional fiat money like the US dollar, the costs Coinbase is referring to are something else entirely. Any transaction will be subject to a charge on blockchains like Ethereum, which many NFT initiatives utilize, and which goes to compensate the individuals who validate it. ETH and other cryptocurrencies are used to pay the fees. Even if you send someone an NFT for no charge, that still holds true.

Notably, neither Coinbase nor the recipient of the NFT receive any portion of the gas fee. The cost varies constantly depending on a number of variables, including the value of the cryptocurrency and the volume of transactions being validated. To put it another way, Apple’s in-app purchase system is not really designed to manage this kind of situation.

Despite this, it is not entirely surprising that Apple informed Coinbase that it could no longer use the NFT transfer method as it had been. The organization revised section 3.1.1 of its App Store review policies in October to expressly address NFTs, as follows:

Applications may employ in-app purchases to sell non-fungible tokens (NFTs) and services associated to them, such as minting, listing, and transferring. As long as NFT ownership does not unlock features or functionality within the app, apps may let users view their own NFTs. Users of apps may browse NFT collections owned by others, provided that no buttons, external links, or other calls to action are present that point users to alternative purchasing options to in-app purchases.
Even though the last sentence in the bolded section is quite obvious, it still surprises me that Apple would ask for a share of the gas taxes. Prior to Coinbase’s tweet thread, I would have assumed that Apple would only insist on the use of its in-app purchase system in scenarios where users could buy or trade NFTs.

Apple is not promptly replying to these Coinbase claims. The interpretation that Apple appears to have used here would effect transfers where you’re simply moving an NFT between your own wallets or sending it as a gift to friends and family, to use an example from Coinbase. (Side note: I would disavow a friend or family member if someone sent me an NFT for whatever reason.)

Though those discussions with Apple might be a little tense after its CEO tweeted that the App Store is a monopoly (the jury is actually still out on that) and that some of Coinbase’s conversations with Apple have been “absurd,” Coinbase says it hopes that this was all just an oversight and that it will be able to resolve things. Coinbase is already responding to user evaluations of its Wallet app and advising users to use the Coinbase Wallet Chrome extension, but if this is truly Apple’s policy, it will be necessary to find a workaround.