Fatwa ID: 08900
Answered by: Maulana Abdurrahman Mohammad
Question:
I want to trade cryptocurrencies in a halal way. I know spot trading on platforms like Binance is considered halal, but in my country, crypto trading is illegal. However, I can withdraw funds using services like bKash. I’m concerned about whether trading crypto in this situation would break my country’s laws, and it’s important to note that breaking country rules is also considered a sin in Islam.
In the name of Allah, the Most Gracious, the Most Merciful
Answer:
Many scholars have differing views regarding the permissibility of investing in cryptocurrencies. One significant concern is that, unlike traditional forms of investment, it is impossible to physically take Qabdah (possession) of these digital assets. Additionally, cryptocurrencies often do not fulfill the criteria of Thamaniyyah (currency), as they are not universally accepted as a medium of exchange for goods and services. Due to these factors, many scholars are of the opinion that trading in cryptocurrencies is impermissible.
If you know the sold item and the price, then we say that the ruling on the sold item, if it is a movable item, is that it is not permissible to sell it before taking possession.[1]
There are many Hadith where the Prophet (ﷺ) prohibits selling things before taking them into possession.
Hakim asked (the Prophet): Messenger of Allah, a man comes to me and wants me to sell him something which is not in my possession. Should I buy it for him from the market? He replied: Do not sell what you do not possess.[2]
Cryptocurrencies do not inherently possess intrinsic value, nor do they represent tangible assets or anything of inherent worth. Additionally, they cannot be directly redeemed for goods or services in the way traditional currencies can. Cryptocurrencies emerge from essentially nothing when mined and can be erased at any time, with no physical backing or guaranteed permanence. You are buying something you can never actually own. It is like buying nothing and selling nothing.
Rather, due to the fluctuations of their prices, it is similar to gambling with money in exchange for a different amount of money with no intermediary exchange. It is similar to betting, where money is placed on a position, profiting when it rises and incurring a loss when it falls.
Therefore, investing in these digital currencies would be impermissible. For more details, please refer to Mufti Taqi Usmani’s works on this topic.
References:
[1] وَإِذَا عَرَفْت الْمَبِيعَ وَالثَّمَنَ فَنَقُولُ مِنْ حُكْمِ الْمَبِيعِ إذَا كَانَ مَنْقُولًا أَنْ لَا يَجُوزَ بَيْعُهُ قَبْلَ الْقَبْضِ
(Al-Fatāwā Al-Hindiyyah, vol 3, pg. 13, Al-Maṭba’ah Al-Kubrā Al-Amīriyyah)
[2] حَدَّثَنَا مُسَدَّدٌ، حَدَّثَنَا أَبُو عَوَانَةَ، عَنْ أَبِي بِشْرٍ، عَنْ يُوسُفَ بْنِ مَاهَكَ، عَنْ حَكِيمِ بْنِ حِزَامٍ، قَالَ يَا رَسُولَ اللَّهِ يَأْتِينِي الرَّجُلُ فَيُرِيدُ مِنِّي الْبَيْعَ لَيْسَ عِنْدِي أَفَأَبْتَاعُهُ لَهُ مِنَ السُّوقِ فَقَالَ “ لاَ تَبِعْ مَا لَيْسَ عِنْدَكَ ” .
(Sunan Abi Dawud 3503, Book 24, Hadith 88)
Only Allah (عَزَّ وَ جَلَّ) knows best.
Written by Maulana Abdurrahman Mohammad
Checked and approved by Mufti Mohammed Tosir Miah
Darul Ifta Birmingham