Are Leveraged Tokens Halal?

Investment Questions and Chats Crypto
#1

Hi,
I searched on Google but couldn’t find any answer.

Are leveraged tokens Halal or Haram?
For example in Binance, you see coins/tokes that are halal and then you see their leveraged tokens. ADA has ADAUP and ADADOWN.

ADA is halal but are UP & DOWN halal as well?

If they are haram, I earned some profit on UP and reinvested. I later think that they are haram (still need proper guidance from you).
If they are haram and why? And what should I do with the profit i earned from it? I reinvested that $100 and had loss on overall portfolio of 100. Can i count it That haram profit was gone in a loss. Even though that loss came from halal coins. Please feel free to ask any further details you need.

Leveraged tokens
Binance Leverged ETF'S Halal Haram?
#2

Unfortunately it is haram as based on the below Arabic article from Iftaa

Leveraged Trading in Arabic called المتاجره بالرافعة المالية

So, please do your best and search for Leveraged trading in Arabic and you will finds details about why it is haram brother! As unfortunately no English details enough about that type of trading.

I came here looking for an answer and fortunately i can speak Arabic so i looked for a translation then found it is Haram as per Aliftaa

1 Like
#3

Wa alaykum salaam,

Leveraged Tokens are not Shariah compliant as they are rebalanced with ongoing futures trading.

1 Like
#4

Thank you soo much mufti sir.

#5

SA,

Are leveraged tokens Halal or Haram?
In Binance, you see coins/tokens along with their leveraged tokens. For instance, BTC has BTCUP and BTCDOWN.

Your thoughts are much appreciated

#6

Assalaamu alaykum,

These leveraged tokens are not Shariah compliant.

Leveraged Tokens hold perpetual futures on FTX. That means that they will get their exposure to the underlying assets through the perpetual futures. That also means that they will be subject to the price movements, premiums, funding rates, etc. of the perpetual futures.

3 Likes
#7

Jazakum Allah Khairan

#8

Binance exchange allow us to buy and sell levereged ETF token
for example
Btcup/usdt or Btcdown/usdt with leverge x2 - x4
Ethup/usdt or Ethdown/usdt

When you buy the a token you own the token in your wallet and you pay daily fees 0.01% for every day holding the token
for example you buy Btcdown/usdt knowing from the chart price might go down
so if the price of bitcoin goes down your token value go up in price,when you sell you pay fees for selling
from what i understand no loans to repay or risking liquidations

#9

if i buy leaveraged token and sell it within a day, than rebalance wont work? in that case it can be halal…

Although, binance etf is intrest free…but if price of btc is going down and you buy btc down you will be in profit…and if price of btc goes up and you buy btcup you will be in profit…is this halal( note within a day, as no case of rebalance)

#10

Imagine buying up or down tokens and not being able to sell because of some emergency or if caught in some work and you are charged interest. Would you still risk it? What’s haram is haram, period…!! The way you are saying would suggest that Futures are also Halal since interest is charged after some time. Stop justifying what your heart says. Mufti told us that it isn’t shariah compliant, this is all we need to know. Sorry for being harsh.

#11

if i have earned 10 dollar from it while not knowing about thus point and reinvested it, than what i have to do with all capital?
as i mistakenly earn 10 dollars and reinvested ?

#12

Assalamualaikum mufti @Mufti_Faraz_Adam , may i know if trading in Binance Perpetual or Quaterly Futures WITHOUT using any leverage(x1 leverage) considered as Halal or Haram?

Thank you in advance mufti, Jazakallah

1 Like
#13

Assalamualaikum Sir,
My question is, I have made a loss of 100$ in Leveraged token.
So can I recover my 100$ loss from Leveraged token and then out of Leveraged token…
This 100$ was my only savings.

#14

I am not a mufti but if i put my money in some coin and later find out its haram , i usually get out at breakeven. 0.01$ profit is haram even so i get out at a dollar loss. Allah knows best. May Allah forgive me.

1 Like
#15

That 100$ was my only savings…
I have to cover it…
That means if i cover my 100$ exactly and didn’t take any extra profit with it, My money will be halal

#16

haram bro because it involve gambling and also future contact is arm in islam

#17

ASSALAM O ALIKOM
So what could we do with the money that we have earned through these leverage tokens???

#18

I honestly burned my haram money. Not suggesting you to do the same. Ask a local mufti since Mufti here looks occupied and not replying.

#19

Thanks for the response brother
I was searching on YouTube and have found my answer which is to distribute the interest money among the poor
:palms_up_together:May Allah forgive us and make us to walk on the right path.

Ameen…

#20

salam alaykum mr adam and thank you for the infos , i would like to ask if
there is a possibility for a spot adadown etf to exist , and if it does would it be Halal ?
i hope you understand what i mean