Apple threatens to remove Jack Dorsey-backed Damus app over in-app transactions

Apple has already made it known that it's not a fan of in-app cryptocurrency transfers, and now it's banging that drum again for a decentralized social messaging app backed by Twitter co-founder Jack Dorsey.

The app is called Damus, and it's based on the decentralized social network Nostr. With that specific integration, Damus is capable of sending in-app micro donations via Bitcoin to other users.

Sending Bitcoin is handled by the Lightning Network, which means users can send fractions of Bitcoins to one another instantly and "almost" free of charge. These specific transactions are known as "zaps" on the social network.

Damus has been ordered by Apple to remove this particular feature from messages, according to The Street. The company has notified the decentralized social messaging app that they may be removed from the App Store if they do not comply, but they can remain in the digital storefront if they remove the feature within 14 days of the notice.

On Twitter, the official Damus account tweeted:

Apple says the ability to send these micro transactions via the app is "selling digital content," which is not allowed. However, the Damus account did twee that "zaps on profiles" are still allowed.

Dorsey tweeted in response to the Damus account that Apple is "incorrect" in its definition of "zaps," and that sending the fractional Bitcoin to other users is "tipping," and a "form of feedback." He says that it's a general misunderstanding on Apple's part.

Twitter CEO Elon Musk tweeted out in response to the situation, saying, "If Apple competes against the whole world, Apple will have the whole world against it. This is not a winning scenario." He would go on to note Apple's App Store tax of 30% on in-app transactions is a "major concern."

Musk purchased Twitter in 2022, while Dorsey is the co-founder of the microblogging social network. The pair of billionaires have had their issues in the past, but appear to be on the same page regarding this particular situation.

As mentioned above, this isn't the first time Apple has found itself in similar waters. The company has said Coinbase "gas" fees as in-app transactions, which should be under Apple's umbrella tax. And NFT trading companies avoid the App Store due to Apple's tax, saying the rules in place from the company make existing in the digital storefront "untenable."