Are Bybit’s Islamic Accounts Halal or Haram?

Rukhsar Rehman

September 25, 2024

Islamic accounts launched by Bybit cannot be considered Halal due to lack of complete Islamic process.

Bybit, a well-known cryptocurrency exchange, has introduced Islamic accounts to attract Muslim traders who are concerned with Shariah compliance in their financial activities.

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These accounts claim to align with Islamic principles, particularly in the areas of interest (riba) and gambling (maysir), two practices explicitly forbidden in Islam.

However, despite these claims, it is crucial to examine whether Bybit’s Islamic accounts are truly halal, considering that even a small element of haram can render the entire system impermissible.

1. Key Principles of Halal Financial Transactions

To determine whether a financial product is halal, it must adhere to the following Islamic principles:

Riba (Interest): Charging or paying interest is strictly prohibited.
Maysir (Gambling): Any form of speculative transactions or gambling is not allowed.
Gharar (Uncertainty): Excessive uncertainty or ambiguity in contracts and transactions is forbidden.

For Bybit’s Islamic accounts to be considered halal, they must fully eliminate any presence of these elements.

2. Bybit’s Islamic Accounts: What Do They Offer?

Bybit has attempted to align its Islamic accounts with Shariah principles by offering interest-free (riba-free) trading.

These accounts are also advertised as swap-free, meaning traders are not charged overnight fees for holding positions, a feature typically associated with interest-based transactions.

At first glance, this might suggest that Bybit is making an effort to comply with Islamic laws. However, further investigation is required to ensure that these accounts don’t involve other prohibited elements, such as maysir or gharar.

3. Cryptocurrency Trading: Is It Halal or Haram?

Before diving into the specifics of Bybit’s Islamic accounts, it’s important to address the broader question: is cryptocurrency trading halal?

The Islamic scholarly community is divided on this issue. Some scholars argue that cryptocurrency can be considered halal because it functions similarly to other currencies, providing value and a means of exchange.

However, many others raise concerns due to the speculative and volatile nature of cryptocurrencies. Since speculation is closely tied to maysir (gambling), this can make cryptocurrency trading impermissible.

4. Concerns with Bybit’s Islamic Accounts

Although Bybit has removed interest and swap fees, other significant issues raise doubts about the halal status of its Islamic accounts:

Leverage and Speculation: Bybit allows traders to use leverage, which means borrowing funds to increase potential profits. This practice involves a high level of risk and speculation, a core component of maysir. Leveraged trading is widely viewed as gambling due to its uncertainty and potential for substantial losses, which makes it haram.
Market Volatility: Cryptocurrency trading, by its nature, is highly volatile and speculative. Even without interest charges, the extreme price fluctuations and the speculative environment closely resemble gambling, which Islam strictly forbids.
Uncertainty (Gharar): The inherent unpredictability of cryptocurrency prices introduces significant levels of gharar (uncertainty), which further questions the permissibility of such trades in Islam.

Final Verdict: Are Bybit’s Islamic Accounts Halal or Haram?

Based on the core principles of Islamic finance, Bybit’s Islamic accounts cannot be considered fully halal.

While the platform has removed interest charges and swap fees, the remaining issues—particularly leverage, speculative trading, and the volatility of cryptocurrencies—introduce haram elements such as maysir and gharar.

Since even a small amount of haram can render the entire financial product impermissible, the speculative and uncertain nature of cryptocurrency trading on Bybit violates Shariah law.

Therefore, despite some efforts to comply, Bybit’s Islamic accounts are haram under Islamic financial principles. Muslim traders should exercise caution and seek alternatives that fully adhere to Shariah law.