Thursday, February 9, 2023
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Flash loan in crypto

Fatwaa ID: 390

Question:
assalamwalaikum
sheikh in crypto there’s a term called flash loan, an unsecured loan, but you have to return the principle amount with a percentage fee
would that be considered riba, haram

Answer:
In the Name of Allaah, the Most Gracious, the Most Merciful.
As-salaamu ‘alaykum wa-rahmatullaahi wa-barakaatuh.

Flash loans in crypto is haraam. The “fee” being charged upon the returning of the loan is actually interest/ribaa. Simply calling it a fee will not change the reality of the matter.

And Allaah Ta’aala knows best.
Mufti Muajul I. Chowdhury
Darul Iftaa New York
https://askthemufti.us/

06/21/1444 AH – 01/14/2023 CE | AMG1-2309

وصل اللهم وسلم وبارك على سيدنا محمد وعلى ءاله وصحبه أجمعين


https://www.quicknode.com/guides/defi/how-to-make-a-flash-loan-using-aave
The Flash Loan leverages atomicity to allow a user to borrow without posting collateral. There are two caveats to mention. First of all, whenever you borrow an asset in a Flash Loan you have to pay a fee of 0.09% of the amount loaned.

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