The Coinbase Wallet app update disables the NFT feature at Apple‘s request, so users of the platform get caught up in Apple’s in-app purchase problems.
In addition, it appears that the operating system giant has asked Coinbase to pay a 30% fee on gas used to transfer NFT in-app, according to Watcher.Guru‘s Twitter account:
JUST IN: Apple blocks #Coinbase Wallet app release, requesting 30% of all NFT transfer gas fees.
— Watcher.Guru (@WatcherGuru) December 1, 2022
Summary
Coinbase stresses: impossible to meet Apple’s demand
Following the controversy stirred up by Apple, Coinbase Wallet sent out an app update that discontinues NFT functionality. This is because Apple has disabled the feature until NFT gas fees can be paid through its in-app purchase system.
The official Coinbase Wallet Twitter account reads:
You might have noticed you can't send NFTs on Coinbase Wallet iOS anymore. This is because Apple blocked our last app release until we disabled the feature. 🧵
— Coinbase Wallet 🛡️📞 (@CoinbaseWallet) December 1, 2022
This could prevent users from transferring non-fungible tokens to other wallets or giving them to friends or family members via Coinbase Wallet iOS.
As an alternative solution, Wallet users can import their recovery phrase into a non-iOS dApp wallet to regain access to NFT transfers, such as the Coinbase Wallet browser extension, MetaMask or Trust Wallet, keeping in mind all security practices.
Moreover, Coinbase said that for anyone who understands how NFTs and blockchain work, Apple’s request is impossible:
“Apple’s proprietary in-app purchase system doesn’t support cryptocurrencies, so we couldn’t adjust even if we tried.”
Coinbase also said that the request made by Apple is similar to when the company sought a reduction in fees for each email sent through open Internet protocols.
One of the biggest problems with this move by Apple is that iOS users who hold their NFTs in an iPhone wallet have to go through a lengthy process to transfer the NFTs.
In this regard, Coinbase stated:
“Simply put, Apple introduced new policies to protect its bottom line at the expense of consumer investment in NFTs and developer innovation in the crypto ecosystem.”
Coinbase Wallet says it is willing to help Apple overcome what it hopes is an oversight on behalf of the company, which is protecting its profits at the expense of consumers and developers.
The action will surely affect an entire sector of iOS users who keep their NFTs in their iPhone wallets. It is unclear whether the decision will be overturned or affect the entire ecosystem.
This is not a first for Apple: before Coinbase there was the dispute with Fortnite by Epic Games
Before the dispute with Coinbase, Apple had to face another one with the publisher of Fortnite Epic Games, which sued Apple in 2020 for not allowing it to use its payment platform instead of in-app purchases through the App Store.
Appeals in the Epic Games vs Apple App Store lawsuit officially began a few weeks ago, continuing the high-stakes legal dispute in what could be a years-long trial.
Indeed, within a few weeks, a disagreement between Epic Games’ ambitions and Apple’s intention to maintain the status quo of the App Store has courted quite a bit of controversy.
The affair began with consumer warnings, but quickly attracted international interest as the battle sought to change one of the core elements of the App Store: how much Apple makes.
Apple’s dominance has previously led to an antitrust investigation by the US Department of Justice into App Store fees and policies. However, the disagreement between Apple and Epic is being made more public and directly affects younger customers.
Although the fight is primarily between Epic Games and Apple, it has already seen other parties come in with their own comments and opinions on the matter, including developers of other apps included in the App Store.
Further backlash for Coinbase: the exchange’s difficulties after FTX
Coinbase’s problem with Apple comes at a difficult time for the cryptocurrency exchange, whose shares are down about 80% so far this year. In addition, the company has also found itself forced to cut jobs to manage expenses as investors are losing interest in cryptocurrencies.
NFTs, on the other hand, which are digital assets that exist on the blockchain and carry unique digital signatures, exploded in popularity in 2021, but have seen demand crippled by the cryptocurrency winter in recent months.
Cryptocurrencies have been rattled by higher interest rates and concerns of an economic recession forcing investors to offload risky assets with the recent collapse of rival exchange FTX also piling pressure on the sector.
However, despite the current difficulties in the crypto world, Coinbase CEO Brian Armstrong had previously reassured his users that his company had no material exposure to FTX or Alameda.
In addition, Coinbase’s Armstrong had previously been quick to emphasize the exchange’s strength, stating:
“I think it’s important to reinforce what differentiates Coinbase at a time like this. This event appears to be the result of risky business practices, including conflicts of interest between deeply intertwined entities and misuse of client funds.”
In fact, according to Armstrong, Coinbase is staying very far away from these kinds of risky situations and behaviors, and also reassures that the platform does not use customer funds in any way, unless expressly directed by it, and that customers can withdraw their funds at any time.
