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Shariah compliance

Source-referenced methodology. HalalCrypto follows a published AAOIFI-aligned screening framework that references AAOIFI standards, Saudi Permanent Committee for Ifta guidance, OIC Fiqh Academy principles, and leading Islamic-finance source material. For personal religious guidance, please consult your own qualified scholar.

How We Decide What's Halal

Four gates, applied before any asset can enter the tradable universe. No exceptions, no discretion outside the published criteria.

Our screening process draws on an AAOIFI-aligned framework, cross-referenced with Saudi Permanent Committee for Ifta and leading Saudi Islamic banks guidance, with documented adaptations for on-chain protocol characteristics. The methodology is published in full below. If you believe an asset has been incorrectly classified, submit it for review — we publish the outcome of every formal challenge.

Methodology basis:an AAOIFI-aligned framework, cross-referenced with the Saudi Permanent Committee for Ifta and leading Saudi Islamic banks, OIC Fiqh Academy resolutions on financial contracts, and the Maqasid al-Shari'ah principle of hifz al-mal (preservation of wealth). This framework is not a fatwa. Investors should consult qualified scholars for personal rulings.

Governance status: the current framework version, review scope, source references, and challenge process are published on the governance page.

01

Business Activity Exclusion

Al-Baqarah 2:275–279; AAOIFI-aligned framework §4–5; OIC Fiqh Academy Resolution 86/3/D9; Saudi Permanent Committee fatwas on usury

Exclude riba, gambling, and haram industries. No asset with intrinsic value or yield derived from interest, or with material protocol-level exposure to prohibited industries, may enter the universe.

  • Riba: stablecoins collateralised by interest-bearing bonds (e.g. T-bill-backed stables) are excluded regardless of yield disclosure.
  • Riba: tokens with embedded interest rebasing (auto-compounding to an interest rate index) are excluded.
  • Gambling: any token powering casino, lottery, or sports-betting smart contracts is excluded.
  • Haram industries: adult content platforms, conventional finance fractional-ownership tokens, and insurance risk-pool instruments are excluded.
  • Business-activity threshold: 5% of network revenue — below this level, incidental exposure is accepted with public disclosure.
  • Re-assessment triggered on any major tokenomics, collateral, or governance change.

Fail = permanent exclusion. No tier override. The 5% threshold is reviewed annually.

02

Financial Ratio Screening

AAOIFI-aligned framework §6; AAOIFI-derived debt-to-assets threshold (30%); leading Saudi Islamic banks guidance

AAOIFI-derived debt-to-assets threshold of 30%. Protocol-level financial leverage beyond this limit signals structural reliance on debt financing incompatible with Shariah principles.

  • Debt-to-assets ratio must remain below 30% — the AAOIFI-aligned threshold for on-chain protocol balance sheets.
  • DeFi governance tokens whose primary protocol revenue is interest income are excluded.
  • Tokens whose protocol treasuries are predominantly held in interest-bearing instruments exceed the ratio threshold and are excluded.
  • Ratio recalculated quarterly using on-chain treasury data and public financial disclosures where available.
  • Newly launched protocols without 12 months of on-chain history are quarantined pending sufficient data.

Fail = exclusion until ratio is remediated and verified at the next quarterly review.

03

Trade Execution Compliance

Al-Baqarah 2:219; AAOIFI-aligned framework §4; Ibn Rushd, Bidayat al-Mujtahid; Saudi Permanent Committee on derivatives

Spot-only. Every order is a direct asset purchase — immediate, fully settled, no leverage. This gate eliminates gharar (uncertainty) and maysir (gambling-equivalent payoffs) at the execution layer.

  • Leverage of any kind is prohibited — not used, not offered, not referenced in any tier.
  • Futures, perpetuals, options, and all other derivatives are structurally excluded from every tier.
  • Margin trading introduces debt and position uncertainty simultaneously — excluded.
  • Only assets trading on a supported spot market with immediate T+0 settlement are eligible.
  • Liquidity minimums by tier: Conservative $50M / Moderate $10M / Multi-X $5M 24-hour volume.
  • Single-asset concentration caps: Conservative 33% / Moderate 25% / Multi-X 20% of deployed capital.

Fail = structural exclusion. Cannot be overridden by tier risk appetite.

04

Liquidity and Concentration Controls

Maqasid al-Shari'ah: hifz al-mal; gharar and maysir risk controls; exchange spot-market liquidity disclosures

A technically permissible asset can still be unsuitable for automated trading if liquidity is thin, spreads are wide, or the position would concentrate too much capital into one asset.

  • Minimum 24-hour volume gates: Conservative $50M, Moderate $10M, Multi-X $5M.
  • Single-asset concentration caps: Conservative 33%, Moderate 25%, Multi-X 20% of deployed capital.
  • Assets with unreliable spot liquidity, abnormal spreads, or exchange restrictions are excluded from execution even if they pass business-activity screening.
  • The allocation cap is set before activation. The launch default is a capped allocation, not full-balance deployment.
  • Liquidity and concentration failures are reviewed whenever exchange conditions or customer allocation settings change materially.

Fail = no automated entry until liquidity and concentration conditions pass again.

Methodology FAQ

Is this a fatwa?

No. HalalCrypto does not issue fatwas and makes no claim to religious authority. The screening methodology is an operational framework grounded in published AAOIFI standards and widely accepted fiqh principles. Individual investors are encouraged to consult their own qualified scholars.

What is AAOIFI?

The Accounting and Auditing Organisation for Islamic Financial Institutions — a Bahrain-based standard-setting body that publishes Shariah Standards used by Islamic banks worldwide. Our framework is AAOIFI-aligned: we draw on AAOIFI principles for digital asset screening, cross-referenced with Saudi Permanent Committee for Ifta and leading Saudi Islamic banks guidance.

How often are coins re-screened?

The full universe is reviewed quarterly. Individual assets are re-screened on any major protocol change (tokenomics update, governance change, underlying collateral change). High-risk events trigger immediate review.

Are stablecoins used?

USDT and USDC are used only as the quote asset for spot trades — they are never held as a return-seeking position. Their collateral composition is reviewed at each quarterly screen.

What happens to a coin that fails a gate mid-subscription?

Any open position in a coin that fails a screen is closed at the next market open at best available price. The customer is notified. No new positions are opened in that asset.

Illustrative screening run (example figures — not live data)

312

assets evaluated (example)

47

passed all screening layers (example)

4

independent screening gates

These are illustrative figures. Live screening data will be published quarterly once the public launch completes. Criteria are published above.

Ready to trade on a halal foundation?

Conservative tier is the easiest starting point — tight stop-loss, liquid blue-chips, daily rebalance.

Start Conservative — $49 USD/mo

Spot-only. No leverage. No withdrawal access. Governed by DIAC.

How tier strategies work

All tiers use the same 4-gate halal screening. The difference between Conservative, Moderate, and Multi-X is the trading strategy — pair selection, position sizing, and stop-loss width — not the screen.

Conservative — low-risk strategy

Safer pairs (BTC, ETH, top halal blue chips), smaller positions per trade, tighter stops (−5%). Designed to preserve capital first; growth follows from compounding small wins on highly-liquid coins.

Moderate — balanced strategy

Mid-range pairs (top-20 halal coins), moderate position sizing, balanced risk/reward. Captures more of the halal universe while keeping drawdowns inside a tighter band than aggressive growth.

Multi-X — aggressive growth

Targets asymmetric multi-X moves, larger positions on conviction trades, wider stops (−8%) for trend-following. Built to ride bigger moves; accepts deeper drawdowns as the cost of upside capture.

Launch activation uses an explicit allocation cap before trading starts. The default posture is a capped allocation, not full-balance deployment. You can pause the bot anytime in your dashboard or revoke the exchange key at the exchange.