Explained: Is crypto Shariah-compliant? Binance launches Islamic finance-aligned investment platform

Time of India

6 days ago

Sharia Earn is live in 29 countries like the UAE, Saudi Arabia, Egypt, and Indonesia, bringing faith-compliant crypto investing to major Muslim markets./ Image: Binance
TL;DR
What:
Binance
has launched
Sharia Earn
, a crypto staking platform structured under
Islamic finance
principles.
Why: Certified
Shariah-compliant
by
Amanie Advisors
under
AAOIFI
standards.
How: Uses wakala contracts to avoid riba (interest), gharar (excessive uncertainty), and prohibited sectors.
Where: Available in 29 countries including the UAE, Saudi Arabia, Egypt, Indonesia.
Impact: Offers millions of Muslim investors access to crypto investing that aligns with their faith-based financial requirements.
Crypto Meets Shariah: The Big Question
On July 10, Binance, the world's largest cryptocurrency exchange by volume, unveiled Sharia Earn, a first-of-its-kind crypto investing platform tailored for Muslim investors.
Now live across 29 countries, including the UAE, Saudi Arabia, Egypt, Indonesia. The launch is not just a regional experiment. It is a structured effort to align modern crypto products with the ethical and legal foundations of Islamic finance.
At the heart of the offering is a long-standing question: can digital assets coexist with Shariah law?
With formal certification from Amanie Advisors, a globally respected Shariah advisory firm, Binance believes they can.
For many of the world's 2 billion Muslims, who have remained cautious about crypto due to religious concerns, this signals a potential shift – not just in access, but in trust.
What Is Shariah Law and How Does It Shape Finance?
Shariah, meaning 'the clear path,' is not merely a set of rules. It is a comprehensive moral and legal framework that guides many aspects of a Muslim's life, including economic behaviour. Under Islamic finance, profit and ethics go hand in hand.
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Three Core Principles in Islamic Finance
No Riba (Interest):
Any fixed return on money lent is forbidden. Money cannot earn profit without effort or risk.
No Gharar (Excessive Uncertainty):
Transactions must be transparent, avoiding excessive speculation, ambiguity, or contractual asymmetry.
No Haram (Prohibited Sectors):
Investments cannot be linked to alcohol, gambling, pork products, adult content, or weaponry. The source of profit must be permissible.
Islamic finance aims to promote fairness, social justice, and shared prosperity, ensuring wealth circulates rather than accumulating unfairly in a few hands.
What Makes an Investment Shariah-Compliant?
Shariah investing is essentially ethical investing with a religious lens. Beyond excluding haram industries, the structure of the financial products matters just as much. Modern Islamic finance isn't just theological theory. It has evolved into a multi-billion-dollar global industry, providing structured investment pathways for Muslims to grow wealth without compromising faith.S
Shariah-compliant investing today includes:
Real estate
and asset-backed investments
Sukuk
– often called 'Islamic bonds,' these instruments do not pay interest but instead grant investors partial ownership in a tangible asset, with earnings tied to its real-world performance.
Equity Funds and Mutual Funds
– These are curated to exclude non-compliant sectors. For example, the Amana Growth Fund (AMAGX), launched in 1994, invests at least 80% in Shariah-compliant common stocks. As of 2017, it managed $1.7 billion in assets nearly half of it in technology companies, with a modest $250 minimum investment.
Index Funds
– Global benchmarks such as the S&P 500 Shariah Index filter out companies involved in prohibited activities. As of October 2017, it included 235 companies, with information technology making up 38% of its weighting. Other indexes include:
S&P Global Healthcare Shariah
S&P Global Infrastructure Shariah
S&P Developed Large & Mid Cap Shariah
S&P Developed Small Cap Shariah
S&P Developed BMI Shariah
Wealth redistribution is also integral.
A portion of wealth, typically 2.5% annually, is paid as Zakat, akin to a charitable tax, meant to support those less fortunate.
The Growth of Shariah-Compliant Funds, A Global Financial Force
Though the idea of Islamic investing took root in the late 1960s, it wasn't until the early 2000s that the industry accelerated. A 2011 report by PwC showed that Shariah-compliant funds grew at an annualized rate of 26% in the first decade of the century.
Between 2002 and 2003, surging petrodollar liquidity and maturing GCC capital markets gave Islamic investors both the resources and access to make their mark.
By Q1 2017, global Islamic assets under management reached $70.8 billion, according to the Malaysia Islamic International Financial Center.
By the end of Q1 2017, global Islamic assets under management (AUM) stood at $70.8 billion, according to the Malaysia Islamic International Financial Center.
What Is Binance?
Binance is the world's largest cryptocurrency exchange by trading volume, with over 280 million users globally as of 2025.
It offers a wide range of financial tools , including spot and futures trading, staking, and digital wallets, and has played a major role in driving mainstream adoption of crypto.
With its technical scale and institutional backing, Binance is one of the few platforms capable of launching faith-aligned financial products globally. Its latest initiative, Sharia Earn, brings halal crypto investing into the digital finance space.
Introducing Sharia Earn
On July 10, 2025, Binance officially launched Sharia Earn, the world's first fully Shariah-compliant multi-token crypto staking platform.
Developed in collaboration with Amanie Advisors, a leading Islamic finance consultancy headed by Dr. Mohd Daud Bakar, Sharia Earn is certified under AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions) standards.
How Sharia Earn Works
Sharia Earn offers crypto rewards through Binance's existing staking infrastructure, structured to meet Shariah-compliance standards.
Key Features:
Wakala Agreement:
Binance acts as an agent under a wakala contract (an Islamic agency contract where users authorise Binance to manage funds on their behalf without guaranteeing fixed returns), deploying funds only into pre-screened, compliant blockchain protocols.
Supported Tokens:
BNB (Simple Earn Locked Products)
Users earn halal rewards daily at a variable rate, paid directly to their Spot Wallets. Rewards are generated on-chain, and users retain full visibility and control. Early withdrawals are allowed but will forfeit accrued rewards.
ETH & SOL (Liquid Staking)
Users receive WBETH or BNSOL upon staking, which represent both the staked asset and earned halal rewards. These tokens increase in value over time, reflecting the staking rate of return. They can be redeemed anytime for ETH or SOL, including all accrued value.
Rate of Return (ROR)
The expected Rate of Return (ROR)* for each token is based on on-chain staking yields:
For BNB, it mirrors the rate used in Simple Earn Locked Products.
For ETH and SOL, the ROR is reflected in the value growth of WBETH and BNSOL.
All reward mechanisms have been reviewed and approved by Sharia scholars to ensure full compliance with Islamic finance principles.
*Note: In Islamic finance, "Rate of Return" (ROR) is used instead of APR to reflect halal, expected earnings from permissible activities.
Is Crypto Shariah-Compliant?
Whether crypto is halal in Islam depends on how it is structured and used. To be Shariah-compliant, it must avoid riba (interest), gharar (excessive uncertainty), and involvement in haram (prohibited) industries. Binance's Sharia Earn serves as a clear example of how crypto can meet these conditions.
The platform uses a wakala contract, where Binance acts as an investment agent rather than a lender or borrower, ensuring returns are not fixed or guaranteed. All participating assets are screened to exclude ties to haram sectors like gambling, alcohol, or conventional finance, while the risks and returns are transparently outlined to eliminate gharar.
Certified by Amanie Advisors and reviewed quarterly under AAOIFI standards, Sharia Earn shows that when properly structured, can indeed be halal.
FAQs:
Q: What is Sharia Earn by Binance?
A Shariah-compliant crypto staking platform offering halal returns through ethical blockchain protocols.
Q: How is it different from regular crypto staking?
It follows Islamic finance rules, avoiding interest, excessive risk, and prohibited industries.
Q: Is it certified as halal?
Yes, certified by Amanie Advisors under AAOIFI guidelines.
Q: What tokens are supported in Sharia Earn?
Currently BNB, ETH, and SOL through Sharia-approved staking models.
Q: Can I withdraw my staked crypto early?
Yes, early withdrawals are allowed, but some rewards may be forfeited depending on the product.