One of the many joys of working in web3 is the enthusiasm of young professionals, looking to learn what they need to learn to dive into this exciting and developing space. In that vein, I have the opportunity this summer to work with Mark August (a current JD candidate at the University of Denver - Sturm College of Law), as an extern with BSL Group, where he is working to support our clients by, among other things, researching emerging regulatory regimes, including the subject of this post - the approch BigTech is taking to broach the ever-shifting regulatory regime surrounding web3 projects and cryptocurrencies.
So, without further ado, I give you an article Mark and I worked on together:
I. Introduction
The recent update to Apple's App Store guidelines, specifically section 3.1.5 (iii) related to cryptocurrencies, has ignited a discussion among app developers and crypto enthusiasts. At the heart of this debate is the question of how Apple evaluates conduct in jurisdictions where no laws exist regarding cryptocurrencies, and whether the updated guidelines provide sufficient clarity for developers.
II. Apple's Updated Guidelines
Apple's official guidelines now state: "Apps may facilitate transactions or transmissions of cryptocurrency on an approved exchange, provided they are offered only in countries or regions where the app has appropriate licensing and permissions to provide a cryptocurrency exchange"1. While at first glance, this change seems to add clarity, its application in practice has left many puzzled.
III. Analysis of Rejected Crypto Exchange Apps
In various instances, crypto exchange apps have been rejected without a clear explanation as to why or how they could achieve appropriate licensing. Feedback from Apple, more often than not, simply refers back to the controversial guideline 3.1.5 (iii). For instance, one exchange proposal was rejected for lacking a license in India, despite the country not requiring such a license for operating a crypto exchange2. Another app faced rejection because it "facilitates the transmission of a virtual currency but was not submitted by a corresponding exchange or recognized financial institution"3.
IV. Apple's Evaluation of Conduct in Jurisdictions with No Related Laws
With no explicit guidance from Apple, it seems that the company's stance on jurisdictions lacking cryptocurrency-related laws is murky at best. Based on the feedback provided in the rejection of certain apps, it can be inferred that Apple may require licensing and permissions even in regions where no specific laws exist around cryptocurrency exchanges.
V. Possible Reasons for Vague Guidelines
The uncertainty surrounding Apple's guidelines has led to several theories. Some believe that Apple is playing the role of a bit license enforcer for governments, using the vagueness of its rules to sidestep potential legal issues4. Others argue that this lack of clarity might stem from incompetence, with ex-App Store head, Phillip Shoemaker, even labelling Apple's developer rules as "arbitrary" and utilized against competitors5. Yet another theory is that Apple is simply trying to avoid legal liability due to recent government crackdowns on crypto exchanges6.
VI. Conclusion
Despite claims of increased clarity for crypto exchanges78, the ambiguity surrounding Apple's updated guidelines persists. The company's lack of clear instructions on handling jurisdictions with no existing cryptocurrency-related laws continues to breed confusion and frustration among developers. Until explicit guidance is provided, the crypto community will likely remain in a state of uncertainty.
Footnotes:
https://developer.apple.com/app-store/review/guidelines/#legal
https://twitter.com/JasonLBaptiste/status/1584634690941911040
https://www.wired.com/story/apples-app-store-review-fix-fails-placate-developers/
https://www.shacknews.com/article/132821/apple-app-store-nfts-crypto-rules
https://appleinsider.com/articles/22/10/24/apple-has-new-app-store-rules-for-nfts-and-cryptocurrency
What kind of lawyer would I be without a disclaimer?
Everything I post here constitutes my own thoughts, should only be used for informational purposes, and does not constitute legal advice or establish a client-attorney relationship (though I am happy to discuss if there is something I can help you with). I can be reached via email (dlopezkurtz@crokefairchild.com or david@bsl.group), telegram (@davidlopezkurtz), twitter (@lopezkurtz), and on LinkedIn here.