Cryptocurrency: Investment or Deception? The Reality Behind Mufti Taqi Usmani’s Fatwa

By Mudasser Anis

Nowadays, if you open social media, almost every other day you come across another success story about cryptocurrency. Someone claims they turned a few thousand rupees into millions, while others insist that cryptocurrency is the currency of the future. Hearing such stories, many people enter this field without fully understanding its reality or the risks involved.

Cryptocurrency is essentially a digital form of currency. It has no physical notes or coins, and it is not backed by any government or central bank. It is bought and sold over the internet, and its value fluctuates entirely according to market supply and demand. This is why its price can soar dramatically in a single day or collapse within a matter of hours.

At first glance, cryptocurrency appears to be an innovative technology built on blockchain. However, the real issue is not the technology itself but the way it is used and the risks associated with it. The reality is that most people buying cryptocurrencies today are not purchasing them to use as a medium of exchange. Rather, they buy them with the hope that prices will rise so they can sell later at a profit. This speculative mindset is what makes cryptocurrency an extremely high-risk investment.

Islam has always encouraged trade and lawful commerce, but it also prohibits transactions that involve deception, excessive uncertainty, gambling-like speculation, or a high likelihood of financial loss. For this reason, many respected scholars and jurists in Pakistan have expressed serious reservations about cryptocurrencies, and some have ruled that, in their current form, they are impermissible under Islamic law. According to these scholars, cryptocurrencies involve excessive uncertainty (gharar), extreme price volatility, and speculative trading.

It is also true that there is no unanimous scholarly consensus on this issue worldwide. Some experts in Islamic finance hold different opinions regarding certain types of crypto assets or under specific conditions. Nevertheless, in the present practical environment, the dominant advice is one of caution, especially for individuals who lack a thorough understanding of this field.

Ordinary people often suffer the greatest losses in the crypto market. They see stories of others making fortunes, dream of becoming wealthy overnight, and invest their savings in the hope of achieving similar success. However, when the market crashes, many lose a significant portion—or even all—of their hard-earned money.

Another unfortunate reality is that most people who incur losses rarely admit them publicly. They remain silent because they fear being ridiculed, labeled as foolish, or questioned for their judgment. As a result, society hears only the stories of success, while thousands of stories of failure remain untold. This silence encourages even more people to follow the same path.

In addition, the cryptocurrency industry has become a breeding ground for fraud, fake investment schemes, and unrealistic promises of extraordinary profits. Many people, driven by greed, invest their life savings—or even borrowed money—and eventually face severe financial hardship.

In my personal opinion, I have had the opportunity to live in the United Kingdom and Europe for several years and to interact with people from diverse backgrounds. Based on my own observations, I have encountered far more individuals who lost money in cryptocurrency than those who profited from it. Certainly, some people have earned substantial returns, but they appear to be relatively few. In contrast, I have met many who suffered significant financial losses but never openly acknowledged them.

I believe this is also a social phenomenon. When people lose money, they often hide their losses because they fear others will say, “You considered yourself so knowledgeable—how could you make such a poor decision?” Because of this embarrassment, stories of failure rarely become public, while a handful of success stories continue to circulate repeatedly. Consequently, newcomers see only the apparent successes and remain unaware of the real risks.

In my view, if we truly want to present an accurate picture of any investment, it is not enough to highlight only the success stories. Failures must also be discussed honestly and transparently. Only then can people make informed and responsible financial decisions.

In conclusion, Islam teaches people to earn their livelihood through honest work, integrity, and genuine trade. An investment does not become legitimate simply because someone has earned substantial profits from it. The true standard is whether it complies with Islamic principles, sound judgment, prudence, and financial responsibility. Therefore, every Muslim should carefully understand the religious, legal, and financial aspects of any new investment before participating in it, seek guidance from qualified scholars and financial experts, and avoid exposing their hard-earned wealth to unnecessary risk.