Apple Rejects Bitcoin Wallet Zeus a Day After Threatening to Delist Damus

Apple (AAPL) has rejected the latest version of non-custodial Lightning-enabled bitcoin wallet Zeus, according to a tweet by Zeus founder Evan Kaloudis.

This comes a day after Apple’s spat with another popular Lightning-enabled bitcoin app – Damus, a decentralized social media platform that runs on the Nostr protocol (Nostr is an acronym for “notes and other stuff transmitted by relays”).

According to tweets from Damus, Apple took issue with the Damus’s “zap” feature, which allows users to send small amounts of bitcoin over the Lightning Network to their favorite content creators as a token of their appreciation, much like Twitter’s “tip” feature. Lightning is Bitcoin’s second layer payment network for cheaper and faster transactions.

Apple has now turned its attention to Zeus, asking the wallet’s creator to provide proof of requisite licenses and permissions for approval to facilitate transmission of a virtual currency or face rejection by Apple’s App Store, according to Kaloudis.

Zeus is apparently in violation of Apple’s guidelines which require apps to provide proof of appropriate licenses – such as money transmitter licenses – in order to facilitate the “transmission” of cryptocurrencies.

Many legal experts agree that non-custodial wallets like Zeus that don’t take custody of funds or private keys should not be classified as money transmitters, a classification typically reserved for custodial wallets like those offered by Coinbase and Binance that do assume custody of customer funds.

“Non-custodial wallets should be approved,” tweeted Breez, another non-custodial Bitcoin wallet currently in Apple’s App Store. “There's a specific exception in the same section. There are a lot of wallets in the App Store.”

The prior version of Zeus is still in the App Store. It’s not clear what changes Kaloudis made to the new version. CoinDesk reached out to Kaloudis, Damus founder William Casarin, and Apple, but none had responded at the time of reporting.

Damus has since agreed to remove the zap button from all content sections. Allegedly, Apple considers zaps on posts equivalent to enabling the sale of digital content. The tech behemoth has allowed Damus to maintain zap functionality at the profile level.

It remains to be seen if some form of compromise will also be reached between Zeus and Apple.