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Apple’s new regulations strengthen their 30% NFT “tax” and exchange geo-limits
Technology powerhouse Apple has updated its App Store policies regarding nonfungible tokens (NFTs) and cryptocurrency exchanges, marking the first time the company has codified precise guidelines for NFTs. The new regulations explain when a cryptocurrency exchange app can be listed, as well as how and for what purposes NFT purchases would be taxed. Its App Store policies were updated on October 24 to include language allowing in-app purchases of NFTs but prohibiting NFTs obtained in other ways from being used for anything other than viewing. Additionally, it permits the use of in-app purchases by applications to “sell and offer services” associated with NFTs such as “minting, listing, and transferring.”
On October 24, 2022, Apple published the most recent adjustment to its App Store policies. The viability of NFT and cryptocurrency apps attempting to run on Apple devices may be a little more challenging. The new rules for cryptocurrency and NFT sales, services, and exchange on the platform are one of the most noticeable changes to Apple’s app store policies. From this point forward, NFTs will be compelled to rely on in-app purchases for sales and services to stay on the platform, with Apple taking its customary 30% cut.
Making sure that all NFT purchases are made in-app, the tech corporation appears to be doubling down on its NFT “Apple tax,” which includes in-app NFT sales in its usual 30% commission rate on all purchases. The inclusion of “buttons, external links, or other calls to action” in apps won’t be permitted because doing so would allow customers to avoid paying app-store commissions when buying NFTs. Additionally, it bans apps from utilizing techniques that might be used to unlock content or functionality within an app, “including QR codes, cryptocurrencies, and cryptocurrency wallets.”
Apple’s new guidelines extend beyond NFT applications and services. New regulations for bitcoin apps and services are also included in the guidelines. The guidelines specify that “Apps may assist transactions or transmissions of cryptocurrencies on an authorized exchange, provided that they are available only in countries or regions where the app has the necessary licensing and authorization to run a cryptocurrency exchange.” The cryptocurrency rule seems to suggest a crackdown on cryptocurrency services that operate in nations where they are prohibited. This may be Apple protecting itself against responsibility in China and other nations that have outlawed cryptocurrency exchange since China has taken a hard line against cryptocurrencies.
The company has come under fire for implementing its 30% commission on NFT sales made through NFT marketplace apps like OpenSea or Magic Eden, a move that has been labeled as “grotesquely overpriced” when compared to the typical 2.5% commissions on NFT purchases. Nevertheless, the rules have been implemented. After learning about the policy, Magic Eden claimed it deleted its service from the App Store, and other NFT markets have reduced the functionality of their applications so that users may only browse and view their own NFTs. Apple’s policies prohibit utilizing cryptocurrency for in-app purchases and only permit the use of fiat money and “valid payment methods” like debit or credit cards.
The updated rules do not alter Apple’s current stance on cryptocurrency trading applications offered by exchanges like Binance and Coinbase, where trades are exempt from the 30% “Apple tax.” To make it clear that cryptocurrency exchange apps can only be featured in their app in “countries or regions where the app has proper licensing and permits to perform a cryptocurrency exchange,” new text has been added.
The long-term impact of Apple’s rule revisions could cause more problems for NFTs and cryptocurrency, two markets that have already experienced some cooling off due to different legal and financial issues. However, this hasn’t stopped entrepreneurs in such markets from making efforts to advance the technology associated with them.