Binance Terra Classic will not apply tax burn for spot trades on the exchange

Binance Terra Classic will not apply tax burn for spot trades on the exchange
Binance Terra Classic will not apply tax burn for spot trades on the exchange

Binance has announced that it will no longer support $LUNC tax burn spot or margin trades made on its exchange. Luna Classic Governance Resolutions 3568 and 4159 were passed to add a 1.2% tax to all on-chain transactions at a block height of 9,475,200.

However, exchange trades are conducted through an internal order book and are not settled on-chain. Only deposits and withdrawals are registered on-chain to ensure fast trade settlement. DEXs allow users to trade on-chain and thus will apply a 1.2% tax burn but other exchanges may follow Binance’s lead.

Binance will apply the tax to all deposits and withdrawals, according to a company press release issued Thursday.

“Deposits: Transactions will be taxed by the Terra Classic network before reaching Binance. The balance will be credited to your Binance account after a 1.2% tax deduction by the network.

Withdrawal: Users will receive a 1.2% tax deduction by the network minus the withdrawal amount charged by Binance

KuCoin announced on Wednesday that it will “support” the tax burn. However, it failed to announce whether it would apply the tax to businesses but confirmed that it would apply to withdrawals and deposits.

In practice, all exchanges must support tax burn for deposits and withdrawals as they are registered on-chain between the exchange and the customer’s wallet. Any announcement that an exchange is supporting the tax is just public relations positioning. However, Binance has provided some new information that it will not honor trade burn.

FatmanTerra responded to KuCoin’s announcement confirming that “you can’t opt ​​out of it” and that “no exchange will ever” support tax burn on trades.

Here’s how you are “supporting” that the burn tax be forced on-chain? You cannot opt ​​out of it This applies to all deposit and withdrawal transactions. Nothingburger PR Post. Imposing actual *business* taxes would be newsworthy, but no major exchange is ever going to do that.

— FatMan (@FatManTerra) September 7, 2022

KuCoin took full advantage of the increased attention in a tweet later Thursday, engaging the Luna Classic community to speculate on the value.

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