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Apple's Tumultuous Relationship With Bitcoin Apps
The company has told a number of developers behind Bitcoin-related apps that their apps contain content -- or facilitate, enable, or encourage an activity -- "that is not legal in all the locations in which the app is available, which is not in compliance with the App Store Review Guidelines."
Bitcoin is a virtual currency, not issued by any government, that can be transferred electronically from one wallet -- basically a special computer file -- to another. The value of the currency is incredibly volatile, with its USD exchange rate going from under $400 to more than $1200 in the past month. At one point, the price of a single bitcoin moved from $1155 to $576 in a few hours. Bitcoins are currently available for around $900 on the Mt. Gox bitcoin exchange.
The concept of a private, virtual currency is a foreign one for governments that can have difficulty staying in the same decade as quickly emerging technologies. Both domestic and international governments are struggling with the currency and how to regulate it. China has banned financial institutions from handling bitcoin transactions, though person-to-person transactions are still allowed.
The U.S. Government has taken a slightly more positive view of bitcoin, however. The U.S. Department of Justice said in a Senate hearing that bitcoins can be "legal means of exchange" and that bitcoin is not "in and of [itself], illegal".
Bank of America Merrill Lynch analysts said in a research report that bitcoin could eventually become a "major means of payment for commerce" and a "serious competitor to traditional money transfer providers". However, federal anti-money laundering and terrorism financing statutes would appear to conflict with the fast-paced development that has pushed bitcoin growth thus far.
While bitcoin use and ownership is not de jure illegal, it nonetheless exists in a legal gray area that could potentially affect users at some point. Gliph, the app mentioned earlier, did not even transfer bitcoin directly. Instead, it used API calls to attach a bitcoin wallet from a third-party company to the app. This allowed Gliph users to transfer bitcoin to one another, similar to how an app developer might use PayPal's API to facilitate checkout and credit card payments in their apps. However, this is the functionality that Apple had the developers remove before it would allow Gliph back on the App Store.
For the most part, Apple has declined to explain how a bitcoin-transferring or -trading app could be approved, nor in what countries the bitcoin functionality might not be allowed. It merely refers to section 22.1 of the App Store review guidelines which states that it is the "developer's obligation to understand and conform to all local laws". The company appears to be taking a wait-and-see approach, both protecting itself and -- perhaps more importantly to the company -- protecting its users. An Apple spokesperson did not respond to an emailed request for comment.
The Gliph blog has one possible theory for Apple's apparent disinclination towards Bitcoin apps:
Among other possible reasons, we wonder if Apple simply doesn’t want to police useful Bitcoin apps in the App Store because they perceive the legal ambiguity of the currency as more trouble than it is worth. Bitcoin is still in an early-adopter phase and probably the majority of Apple’s customers are unaware the currency exists and not looking for these types of apps anyway. Better to avoid this type of software for now, and take the option to change their mind in the future.Earlier this year, Apple removed the app for the bitcoin buying and trading platform Coinbase from its store. The story is similar for Blockchain.info, Bitpak, and Bitcoin Express -- all Bitcoin-related apps that were either removed or rejected from the App Store. The Gliph blog has more details on the various apps. Most of them received rejection language similar to section 22.1.
There are still Bitcoin-related apps on the App Store, however most do not provide the ability to purchase, sell or transfer bitcoins. As a result, some exchanges -- including Mt. Gox, one of the largest -- have instead chosen to develop mobile websites for wallet-holders rather than dedicated apps. Google has taken a more hands-off approach, largely allowing Bitcoin apps to remain on its Google Play store.
As bitcoin becomes more widely accepted -- and regulated -- by Governments and large financial institutions alike Apple may become more accepting, but in the meantime, the company seems to have made its position clear.
Gliph is a free download on the App Store, however its bitcoin functionality is limited to viewing bitcoin wallets, with no transfer capabilities. Its secure messaging and cloaked email capabilities remain intact. [Direct Link]