We noticed there isn’t (yet) an official sharia standard for cryptocurrencies. So to help everyone out, we are sharing our own sharia screening of the top 50 cryptocurrencies. This is a live list that will be added to inshAllah.
To be clear – this has not been reviewed by muftis – this is our own live working draft to guide our own investing. Last updated 16 February 2021.
By the way – we’re launching an IFG Crypto Course with a mufti. Sign up to the waitlist below.
Top 50 Cryptocurrencies by Market Cap
|Rank||Name||Ticker||Type||Halal?||Whitepaper Link||Sharia Analysis||Where can I buy it?||IFG Holding|
|1||Bitcoin||BTC||Cryptocurrency||Yes||here||BTC is a straightforward cryptocurrency and has been deemed permissible by many scholars (though some do disagree. See this article). It is best understood at this point as a digital asset (as opposed to a currency just yet) and as such delayed delivery/receipt of BTC is permissible.||here||Yes|
|2||Ethereum||ETH||Cryptocurrency||Yes||here||Similar analysis to BTC||here||No|
|3||Tether||USDT||Stablecoin||Grey||here||Tether claims to be backed 1:1 by USD, but based on news stories and legal filings, this is not the case and the company behind Tether have been lending out the money generated by Tether coins to generate profit (from interest) so that each Tether is only backed 75% by USD. That alone is probably not enough to deem it haram, but there are serious question marks over Tether, supporting their (essentially) banking business model, and from a moral perspective we're not sure reverting back to the interest-based model of making money is the right way forward.||here||No|
|4||XRP||XRP||Cryptocurrency||Yes||here||Similar analysis to BTC||here||No|
|5||Litecoin||LTC||Cryptocurrency||Yes||None||Similar analysis to BTC||here||No|
|6||Bitcoin Cash||BCH||Cryptocurrency||Yes||here||Similar analysis to BTC||here||No|
|7||Cardano||ADA||Cryptocurrency||Yes||here||Similar analysis to BTC||here||No|
|8||Polkadot||DOT||Cryptocurrency-Adjacent||Yes||here||The DOT token is simply an agnostic token that allows you to transact within the Polkadot ecosystem however the idea is that lots of external third parties can plug and use this ecosystem to transact. Fundamentally, the more people use this ecosystem, the greater the liquidity and demand for the DOT token. One point to bear in mind from a sharia perspective is if one ecosystem becomes overwhelmingly linked with a haram industry then there may be an issue. However right now its all too early to make such a judgement call.||here||No|
|9||Chainlink||LINK||Cryptocurrency-Adjacent||Yes||here||Similar analysis to DOT||here||No|
|10||Binance Coin||BNB||Cryptocurrency||Yes||here||Similar analysis to BTC||here||No|
|11||Stellar||XLM||Cryptocurrency-Adjacent||Yes||here||Similar analysis to DOT||here||No|
|12||USD Coin||USDC||Stablecoin||Yes||here||Unlike Tether, USDC doesn't have any reputational clouds hanging over it, and the people behind it are people who benefit from the infrastructure of crypto - and as such they don't have a strong incentive (like the Tether company) to work out a way to make money from this cryptocurrency (i.e. by lending it out).||here||No|
|13||Wrapped Bitcoin||WBTC||Cryptocurrency||Yes||here||Similar analysis to BTC||here||No|
|14||Bitcoin SV||BSV||Cryptocurrency||Yes||here||Similar analysis to BTC||here||No|
|15||Monero||XMR||Cryptocurrency||Grey||here||Monero is a privacy-focused coin (so you can't see source, amount destination as an outsider), which, inevitably, has seen strong uptake from criminal elements. From a sharia perspective there is nothing technically wrong with holding a coin that others use for criminal enterprises, however from a taqwa perspective we would be uncomfortable adding liquidity (and value) to a currency that is gaining most of its traction by the degree of uptake it is getting in the criminal world.||here||No|
|16||EOS||EOS||Cryptocurrency||Yes||here||Similar analysis to BTC||here||No|
|17||TRON||TRX||Cryptocurrency||Yes||here||Similar analysis to BTC||here||No|
|18||NEM||XEM||Cryptocurrency||Yes||here||Similar analysis to BTC||here||No|
|19||Tezos||XTZ||Cryptocurrency||Yes||here||Similar analysis to BTC||here||No|
|20||Theta||THETA||Cryptocurrency||Yes||here||THETA aims to reward users with THETA tokens for opening up their free CPU resource so that video streaming services can be provided without lag/glitches etc. The underlying issue is that last-mile-delivery on video streaming is poor and THETA can help provide the computational resource to help solve that. This is all fine.|
Where it gets a little bit greyer is THETA being used within the video ecosystem itself. Ultimately my view is that this is fine too, but one to keep an eye on, in case THETA suddenly has mass adoption by illicit streaming sites etc.
|21||Neo||NEO||Cryptocurrency||Yes||here||Similar analysis to BTC||here||No|
|22||VeChain||VET||Cryptocurrency||Yes||here||Similar analysis to BTC||here||No|
|23||Crypto.com Coin||CRO||Cryptocurrency||Yes (just about)||here||CRO broadly has a similar analysis as that applied to BTC. However the reason for our "just about" comment is that CRO is part of the Crypto.com ecosystem which plans to introduce a range of yield farming and lending features/products as part of the value-add for CRO. Ultimately, the CRO use case is not inextricably linked to the haram elements of Crypto.com's plans so we can get comfortable with holding CRO, however where the haram elements of the business become a key driver for CRO's value, caution/taqwa would suggest exiting your position at that point.||here||No|
|24||Uniswap||UNI||DeFi||Yes (just about)||here||UNI is a token for a project that essentially doubles up as a broker-less crypto exchange platform. Think coinbase, but automated and without a central clearing authority. So far so good. But the issue here is that UNI structure relies on people to contribute in their coins (and get paid a fee for this) into the system to provide liquidity. |
Exchanging using Uniswap itself is fine. But that is not the question here.
The question is whether UNI itself is inextricably structured to be used in a way that ends up being sharia-non-compliant. The key issue is the contribution of coins to provide liquidity.
Either we view this as some form of lending out or we see it as taking an equity-like position or revenue-sharing position that someone. On the basis that fundamentally each contract does not diminish with each exchange (rather it is balanced out with the new coin that is entered in) we consider uniswap to be using a form of revenue-sharing or taking mini-equity-like positions in each Exchange Contract.
|25||Aave||AAVE||DeFi||No||here||AAVE is a lending ecosystem designed to help holders of cryptocurrency lend their coins out for a higher return. The crucial thing here is that a cryptocurrency is borrowed and then more of that cryptocurrency is returned. That is straightforwardly riba and not permissible.|
AAVE itself is not a haram asset per se, but our (cautious) view is that it is so inextricably linked up in its very origination as something that gets value from lending activity, that it is not something to support by even holding AAVE.
|26||Synthetix||SNX||DeFi||No||here||The entire basis for SNX is to enable the Synthetix ecosystem which is a derivatives trading system. Derivatives are not permissible according to most Islamic scholars and doing it via a DeFi model doesn't fundamentally change the fiqhi analysis.||here||No|
|27||Maker||MKR||DeFi||Yes (just about)||here||The core attraction of this token is that you get paid a stability fee when crypto assets are stored in a Maker Vault. This is a % amount on the amount you store. We have understood this to be a storage fee as opposed to interest, as the money is being paid by the depositor, not the vault. However the problem is that you only deposit things to allow you to make DAI. Ultimately we can get comfortable with this due to two things. Firstly the repayment amounts are in different cryptocurrencies to those in the vault itself (and it is allowed to exchange different currencies at other than par value) and secondly as it genuinely appears that the stability fee is to allow the maintenance of the instrastructure of MAKER. We will keep this cryptocurrency under careful review as the use case develops.||here||No|
|28||UNUS SED LEO||LEO||Cryptocurrency||Yes||here||Similar analysis to BTC||here||No|
|29||Dai||DAI||Stablecoin||Yes||here||Similar analysis to BTC, but it is underpinned by a portion of USD. The Dai Savings Rate however is a separate concept that we have not commented on here.||here||No|
|30||Dash||DASH||Cryptocurrency||Grey||here||Similar analysis to Monero||here||No|
|31||Cosmos||ATOM||Cryptocurrency||Yes||here||Similar analysis to BTC||here||No|
|32||Celsius||CEL||DeFi||No||here||The entire purpose of CEL tokens is to allow people to lend USD (or other cryptocurrencies) and for others to borrow that on interest. While technically, like for most of the interest-based lending crypto projects, it is possible to hold the token without earning interest (or donating it), the entire premise of the project is interest-based lending. Best avoided.||here||No|
|33||Dogecoin||DOGE||Cryptocurrency||Yes||here||Similar analysis to BTC||here||No|
|34||Zcash||ZEC||Cryptocurrency||Grey||here||Similar analysis to Monero||here||No|
|35||Binance USD||BUSD||Cryptocurrency||Yes||here||Similar analysis to BTC||here||No|
|36||IOTA||MIOTA||Cryptocurrency||Yes||here||Similar analysis to BTC||here||No|
|37||Revain||REV||Cryptocurrency||Yes||here||Similar analysis to BTC||here||No|
|38||Huobi Token||HT||Cryptocurrency-Adjacent||Yes||here||HT is a token of the Huobi Mining Pool - which in turn is set up to mine different cryptocurrencies and earn money that way.||here||No|
|39||Filecoin||FIL||Cryptocurrency||Yes||here||Similar analysis to BTC||here||No|
|40||yearn.finance||YFI||DeFi||No||here||YFI is a token that is specifically designed to interact with a bunch of DeFIs (e.g. Aave, dydx and Compound) via its ecosystem. It is building in Yield (interest-based usually) and derivative functionality.||here||No|
|41||Ethereum Classic||ETC||Cryptocurrency||Yes||here||Similar analysis to BTC||here||No|
|42||FTX Token||FTT||DeFi||No||here||This project is bringing leveraged/margin trading, short-selling and the general forex vibe to crypto. Gut instinct is to avoid at all costs.||here||No|
|43||Solana||SOL||Cryptocurrency||Yes||here||Similar analysis to BTC||here||No|
|44||Compound||COMP||Cryptocurrency||No||here||Similar analysis to Aave||here||No|
|45||Zilliqa||ZIL||Cryptocurrency||Yes||here||Similar analysis to BTC||here||No|
|46||Decred||DCR||Cryptocurrency||Yes||here||Similar analysis to BTC||here||No|
|47||Waves||WAVES||Cryptocurrency-Adjacent||Yes||here||Similar analysis to DOT||here||No|
|48||Elrond||EGLD||Cryptocurrency||Yes||here||Similar analysis to BTC||here||No|
|49||Kusama||KSM||Cryptocurrency-Adjacent||Yes||here||Similar analysis to DOT||here||No|
|50||SushiSwap||SUSHI||DeFi||Yes (just about)||None||Similar analysis to UNI||here||No|
|51||Hedera Hashgraph||HBAR||Cryptocurrency-Adjacent||Yes||here||Similar analysis to BTC||here||Yes
|52||Horizen||ZEN||Cryptocurrency||Grey||here||Similar analysis to Monero||here||No|
|53||Verge||XVG||Cryptocurrency||Grey||here||Similar analysis to Monero||here||No|
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