Apple’s Rejection of Zeus Bitcoin Wallet Raises Concerns for Lightning Network Apps

Apple has recently rejected the most recent iteration of Zeus, a bitcoin wallet that operates on the Lightning Network without custodial services, according to a tweet by Evan Kaloudis, the founder of Zeus.

This rejection followed a disagreement between Apple and Damus, another well-known Lightning-enabled bitcoin application. Damus functions as a decentralized social media platform utilizing the Nostr protocol.

Apple’s Clash with Lightning Network Bitcoin Wallets Raises Concerns and Questions

According to tweets from Damus, Apple raised objections to the platform’s “zap” feature, which allows users to send small amounts of bitcoin over the Lightning Network to their favorite content creators as a form of appreciation, similar to Twitter’s “tip” feature.

The Lightning Network functions as an auxiliary payment network for Bitcoin, facilitating quicker and cheaper transactions.

Apple has turned its focus to Zeus, urging the creator of the wallet to furnish proof of the required licenses and permissions for enabling the transactions of virtual currency. Non-compliance with Apple’s guidelines could lead to rejection from the App Store.

Apple’s guidelines mandate that apps must demonstrate proof of appropriate licenses, such as money transmitter licenses, when facilitating the “transmission” of cryptocurrencies.

Numerous legal professionals contend that non-custodial wallets such as Zeus, which do not possess funds or private keys, should not be classified as money transmitters. This categorization is typically reserved for custodial wallets like those offered by Coinbase and Binance, which take responsibility for holding customer funds.

At present, the previous iteration of Zeus can still be found on the App Store, while the specific alterations made by Kaloudis in the new version remain unknown. CoinDesk has attempted to contact Kaloudis, Damus founder William Casarin, and Apple for additional details, but as of the reporting time, no response has been received.

Damus has since agreed to remove the zap button from content sections to comply with Apple’s requirements. Apple views zaps on posts as a potential means of selling digital content.

However, Damus has been allowed to retain zap functionality at the profile level. The resolution between Zeus and Apple remains uncertain, and it remains to be seen if a compromise will be reached.

Navigating Apple’s Crypto Policy – Separating Fact from Fiction and Assessing the Landscape

While the latest development with Zeus might indicate Apple’s skepticism of crypto, a Block report from last month might say otherwise.

The headline in The Block made a bold claim about Apple’s relaxation of its crypto policy, highlighting an announcement by fitness app Stepn that allowed users to trade NFTs directly within the app. This news, if true, would have significant implications. However, upon closer examination, it becomes apparent that the story is not as it initially appears.

Stepn’s CEO expressed immense enthusiasm for the new feature, praising Apple extensively. Strangely, The Block’s article did not include any comments from Apple itself. Skeptics, like the founder of ZenGo, dampened the excitement by pointing out that Stepn simply introduced a token that could be used to purchase NFTs through Apple’s existing in-app purchase system, a practice already employed by Reddit and others.

For those unfamiliar, in-app purchases allow iPhone users to buy various items within an app, ranging from gaming merchandise to news subscriptions, without leaving the app itself. However, this convenience comes at a cost, as app makers are required to give Apple a significant 30% share of the proceeds.

This arrangement has drawn criticism from publishers, game developers, and others who find it burdensome to surrender such a substantial portion of their sales to the world’s third-largest company. Nevertheless, this is the current reality.

The maker of the popular game Fortnite previously filed a lawsuit against Apple, accusing it of maintaining a monopoly. However, an appeals court ruled 2-1 last month that Apple had not violated antitrust laws.

Fortnite did achieve a small victory when the court deemed Apple’s prohibition on app makers informing customers about the option to purchase digital items on other platforms illegal. This practice exemplifies the tight control Apple exercises over its platform.

Ultimately, the Stepn story lacks substance and appears to be an instance of a CEO generating misleading headlines to bolster their company’s position in a bear market. Nonetheless, this episode serves as a reminder of Apple’s significant influence on the technology and payments landscape.

In an alternate world, Apple would foster an ecosystem that encourages the growth of new innovations, including cryptocurrencies, on its platform instead of relying on credit card giants. However, that is not the reality we currently inhabit, and Apple’s 30% commission continues to dominate.

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