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Leveraged token, haraam earning

Fatwaa ID: 582

Assalamu Alaikum

What is the ruling on trading leveraged tokens, which are tradable assets in the spot market that allows you to gain leveraged exposure to a cryptocurrency. The price of a token is driven by the underlying fund’s performance and its associated leverage.

Secondly, if one was unknowingly earning money from an impermissible source and have repented and let go of it after finding out, are they also obligated to get rid of the amount they earned by donating it, or can they keep it and make use of it?

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

  1. It is not permissible to trade leveraged tokens. It is an invalid transaction and a form of gambling.
  2. Yes. Haraam wealth must be given away in charity without any expectation of reward. Haraam wealth is impure and a source of regret and remorse. You may keep the capital only.

And Allaah Ta’aala knows best.
Mufti Muajul I. Chowdhury
Darul Iftaa New York

07/23/1444 AH – 02/14/2023 CE | AMG1-2784

وصل اللهم وسلم وبارك على سيدنا محمد وعلى ءاله وصحبه أجمعين


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