Binance Exchange will not apply Terra Classic tax burn

Binance Exchange will not apply Terra Classic tax burn

 

The $LUNC tax burn to spot or margin trades implemented on Binance Exchange will not be supported, according to the exchange platform companys announcement.

 

At a block height of 9,475,200, the Luna Classic governance proposals 3568 and 4159 were accepted, imposing a 1.2% tax on all on-chain trades.

 

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As per a report, exchange trades, however, are not settled on-chain and are instead managed through an internal order book. To ensure quick settlement, only deposits and withdrawals are registered on the Blockchain Network. DEXs will apply the 1.2% tax burn because they let users trade on-chain, but other exchanges are probably going to follow Binance Exchanges example.

 

Binance exchange in press release said, For Deposits, transactions will be taxed by the Terra Classic network before it reaches Binance exchange. The balance will be credited to your Binance exchange account after the 1.2% tax deduction by the Terra classic network. For Withdrawals, customers will receive the withdrawal amount minus withdrawal fees charged by Binance exchange and the 1.2% tax deduction by the blockchain network.” 

 

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On Wednesday, KuCoin also announced that it will “support” the tax burn. However, it did not specifically mention whether the tax would be applied on trades, just only that it would be applicable to withdrawals and deposits, Cryptoslate noted.

 

In the meantime, deposits and withdrawals are reported on-chain between the exchange and the customer’s wallet, every exchange will really need to back the tax burn for these operations. Any declaration that an exchange supports the tax is nothing more than public relations spin. However, Binance Exchange did reveal some novel information, namely that it will not respect trade burn.