Is Crypto Mal? The Question Behind Every Verdict

Most halal crypto arguments are about riba or gambling. They are the loud ones, and they are downstream of a quieter question that decides the whole matter first.

Is a cryptocurrency wealth at all?

If the answer is no, nothing else needs discussing. You cannot validly sell what is not property, so the riba analysis, the maysir analysis and the revenue screening are all moot. This is precisely the ground on which Mufti Taqi Usmani reached his conclusion, and it is why his ruling cannot be answered by pointing out that Bitcoin charges no interest.

What mal means

Mal is the Arabic term the jurists use for property or wealth, and it is a legal category with conditions rather than a loose word.

Classically, two attributes had to be present. The thing must have utility recognised as beneficial, manfa'ah, and it must be capable of being stored, possessed and disposed of, taqawwum. Something with no benefit is not wealth, and something you cannot hold or transfer is not wealth either, however valuable it might be in principle.

The historic fault line runs through tangibility. The dominant Hanafi position required mal to be a tangible thing, 'ayn, with rights and usufructs treated as a separate and lesser category. Maliki and Shafi'i jurists were generally broader, admitting rights and benefits as property in their own right.

That disagreement, settled centuries ago about houses and grazing rights, is the one crypto walked into.

The two positions, stated fairly

Mufti Taqi Usmani's case. Cryptocurrency does not qualify as mal. It is not a tangible thing, it has no intrinsic utility independent of its exchange value, and it is not issued or backed by any authority. Since it is not property, buying and selling it is not a valid sale. His position extends explicitly to tokens and stablecoins, and he has said that renaming a thing a coin, token or stablecoin does not change the ruling. He is also clear that the assessment could be revisited if usage changed.

Take the argument seriously before answering it. It is not a technophobic reaction. It is a consistent application of a narrow tangibility requirement, from a former chairman of the AAOIFI Shariah Board, and if you accept the premise the conclusion follows.

The urf case. The counterargument runs through custom. Contemporary Hanafi authorities, including Mufti Taqi Usmani himself in other work, have accepted that the definition of mal expands through urf, established custom. Copyrights, trademarks and goodwill are intangible, produce no physical benefit, and are treated as wealth by every functioning market including in Muslim jurisdictions. If society treats a thing as valuable, storable and transferable, it becomes mal.

Mufti Muhammad Abu-Bakar built the most cited version of this in his 2018 paper for Blossom Labs, arguing that Bitcoin is desirable, storable in digital wallets, and widely accepted in exchange, and therefore satisfies the conditions through urf. His full position, including the three-tier jurisdictional framework he proposed, is in our scholar dossier.

Mufti Faraz Adam reached a related conclusion by a narrower route, holding that crypto-assets with lawful utility can be deemed mal on the basis of al-urf al-khass, the established custom of a specific community rather than of society at large. His position evolved across three phases, which is worth knowing because it shows a scholar updating on evidence rather than defending a first answer.

The Fiqh Council of North America approached it from the other end, invoking al-asl fi'l-ashya' al-ibahah, the principle that the default in transactions is permissibility, and finding the objections insufficient to overturn it. Their 2019 resolution declared Bitcoin essentially halal.

And the Securities Commission Malaysia's Shariah Advisory Council did something more consequential than any of them, which I will come back to.

Where the argument actually bites

Notice that the urf argument is strongest for exactly one kind of asset and weakest for another. This is the part that gets lost when the question is treated as "is crypto mal," singular.

Bitcoin has the strongest case. Fifteen years of continuous operation, an ascertainable supply, self-custody through keys, and treatment as wealth by an enormous number of people including institutions and several governments. If urf establishes mal, BTC is where it establishes it most clearly.

A token launched last Tuesday has the weakest. No established custom, no adoption, and frequently no utility. Custom cannot be asserted into existence by a launch announcement.

This is why the honest version of the property question produces a per-asset answer rather than a single ruling. Which is exactly the Shariyah Review Bureau's stated principle: it would be inaccurate to give one ruling for all cryptocurrencies.

The six-point test we actually apply

Our methodology turns the property question into something checkable. An asset must satisfy all six.

It must presently exist on the network. This is what disqualifies an unminted presale token from being property today, and why buying a future claim is a different contract requiring different conditions.

It must be exclusive and ascertainable. Known supply, identifiable holdings.

It must be holdable and transferable without permission. This is the clause that does the most work in practice, and it comes straight from qabd, the classical concept of possession as actual capacity to control and dispose. It is why USDT and USDC sit at Doubtful: an issuer that can blacklist your address means your possession is conditional. It is also why self custody is not merely prudent but doctrinally relevant.

It must carry at least one lawful use. Not a promised use, a present one.

It must be treated as wealth by market participants. This is urf, operationalised.

It must be free of ambiguity about supply, mint authority and freeze powers. Undisclosed mint authority is not a small disclosure gap, it means the supply is unknowable, and the exclusivity condition fails.

Why passing the property test is not enough

The most useful illustration in our whole dataset is Hyperliquid.

HYPE passes the property test cleanly. It presently exists, has an ascertainable supply, is a native protocol position rather than a claim against a company, is self-custodied and transferable without permission, and carries confirmed lawful utility as gas and staking. On the mal question it does better than USDC.

It is still Haram, because the protocol integrates a perpetuals exchange at the consensus level and roughly 99% of retained trading fees are recycled into token buybacks.

That is the architecture of the framework in one example. The property test asks whether there is something here to own. The three layers ask whether owning it is permissible. Both have to pass, and they fail independently.

The ruling that moved the ground

The Securities Commission Malaysia's Shariah Advisory Council did something at its 233rd and 234th meetings in June and July 2020 that no fatwa quite achieves. It classified digital assets as 'urudh, goods or commodities, rather than as currency.

That single classification does enormous work. It resolves the property question affirmatively, and because digital assets are not currency, they fall outside bai' al-sarf, the rules governing exchange of monetary metals that require immediate simultaneous delivery. Spot trading of digital assets on registered exchanges became permissible in the largest Islamic finance jurisdiction with a formal regulatory Shariah body.

It is the most consequential ruling in this space and almost nobody has written it up properly, so we did.

Where this leaves you

If you accept the tangibility requirement in its narrow form, Mufti Taqi Usmani's conclusion follows and you should not hold any of this. That is a coherent position held by a major scholar and I am not going to be glib about it.

If you accept that urf expands mal, as the majority of contemporary bodies working on this have concluded, then the question becomes which specific assets have established that custom and carry lawful use, and you are back to screening one asset at a time.

What I would not do is treat this as settled in either direction, or accept a verdict from anyone, including us, without knowing which premise it rests on. All six scholar positions are documented with their actual citations, and a side-by-side comparison is the fastest way to see where they diverge.