Friday, March 1, 2024
No menu items!

Leveraged token, haraam earning

Fatwaa ID: 582

Question:
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?

Answer:
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
https://askthemufti.us/

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

وصل اللهم وسلم وبارك على سيدنا محمد وعلى ءاله وصحبه أجمعين


https://learn.bybit.com/trading/leveraged-tokens-explained/

__________________
Disclaimer

Darul Iftaa New York answers questions on issues pertaining to Shari’ah. These questions and answers are placed for public view on askthemufti.us for educational purposes. The rulings given here are based on the questions posed and should be read in conjunction with the questions. Many answers are unique to a particular scenario and cannot be taken as a basis to establish a ruling in another situation. 

Darul Iftaa New York bears no responsibility with regard to its answers being used out of their intended contexts, nor with regard to any loss or damage that may be caused by acting on its answers or not doing so.

References and links to other websites should not be taken as an endorsement of all contents of those websites. 

Answers may not be used as evidence in any court of law without prior written consent of Darul Iftaa New York.