Is Buying Stocks on Backpack Exchange Halal?
The tokenized stock market has grown faster in 2026 than almost anyone predicted.
Six months ago, buying shares of Apple, Nvidia, or Tesla on a blockchain was an experimental concept with genuine questions about whether the underlying shares were actually there. Today it is an SEC-regulated reality backed by the same infrastructure that settles trillions of dollars in traditional stock market transactions every single day.
Backpack Exchange launched Backpack Securities in June 2026, becoming one of the first crypto exchanges to offer genuine, legally-owned, DTC-custodied stock holdings on a blockchain. The same week, SpaceX completed the largest IPO in history at $75 billion, and Backpack was the platform that actually delivered tokenized SpaceX shares to its users while competitors failed.
For Muslim investors who have been following CoinStudy's coverage of tokenized stocks, this development is significant. And it requires a careful and honest analysis that distinguishes between what is genuinely better about Backpack's structure and where specific concerns remain.
We ran Backpack Securities through the CoinStudy HCS framework and consulted our Shariah Board Chairman Dr. Mufti Usman Quddus, PhD in Islamic Studies and Finance, AAOIFI standards. Here is the complete picture.
Quick Answer: Buying Halal Company Stocks on Backpack
Buying and holding stocks of halal companies on Backpack Securities is Halal With Concerns under the CoinStudy Halal Crypto Standard, consistent with our existing ruling on tokenized equities from our Shariah Board Chairman.
The structural backing of Backpack Securities is actually stronger than xStocks in meaningful ways that matter for Islamic finance assessment. However Backpack Exchange also offers perpetual futures trading, Auto Lend yield products, and a cross-margined account design that creates compliance concerns when stocks are used as collateral for these products.
Buying and holding stocks of halal companies in spot only, without cross-margin, without Auto Lend, and without using stocks as futures collateral, is the permissible pathway.
What Is Backpack Securities?
Backpack Exchange launched Backpack Securities in June 2026 as its regulated financial arm for tokenized equities on Solana.
The key distinction from most tokenized stock products is the regulatory and custody infrastructure underneath. Backpack operates as a regulated U.S. broker-dealer through its partnership with Superstate, which is an SEC-registered transfer agent. Shares purchased through Backpack Securities are held by DTC, the Depository Trust Company, which is the backbone of the entire U.S. financial system, processing hundreds of millions of transactions annually and custodying assets valued at over $114 trillion.
Backpack is also one of over 50 firms including BlackRock, Goldman Sachs, JPMorgan, Citi, Morgan Stanley, and Kraken in DTCC's Industry Working Group developing the DTC Tokenization Service, with initial limited production trades planned for July 2026 and a full service launch targeting October 2026.
This is not experimental technology. This is the existing backbone of global financial markets being extended to include blockchain settlement.
How Backpack Securities Differs From xStocks
CoinStudy has published a comprehensive guide to xStocks including our Shariah Board Chairman's direct ruling on the four key activities. Muslim investors who have read that analysis will naturally ask how Backpack Securities compares.
The differences are meaningful and in several cases favor Backpack's structure from an Islamic finance perspective.
Custodial Structure
xStocks are issued by Backed Finance under a Swiss regulatory framework, with physical shares held in regulated custody by licensed third-party custodians. This is a legitimate and professional structure, but the custodial chain runs through European regulatory infrastructure.
Backpack Securities uses DTC custody directly. DTC is not a third-party custodian that might face financial difficulties or operational disruptions. It is the central securities depository for U.S. markets and processes the settlement infrastructure for the entire American stock market. The custodial confidence level with Backpack's DTC structure is materially higher than with xStocks' custodian model.
Legal Ownership Rights
xStocks, like most tokenized stock products, represent custodial tracker certificates. Token holders have creditor rights to the underlying shares rather than direct shareholder registration in many structures.
Backpack Securities, through the DTCC partnership and SEC No-Action Letter authorization, provides the same entitlements, investor protections, and ownership rights as assets held in traditional form, according to DTCC's own published description of the service. The tokenized shares retain full legal protections equivalent to traditionally held securities.
The SpaceX Test — Why It Matters
The June 2026 SpaceX IPO created the most important real-world test of tokenized stock infrastructure to date. SpaceX priced its IPO at $135 per share, becoming the largest public offering in history at $75 billion. The demand for tokenized SpaceX exposure was enormous.
Multiple platforms, including xStocks distributed through Binance, Bybit, Bitget, and MEXC, promised customers SpaceX tokenized exposure but were forced to cancel over $1 billion in orders and issue refunds. They could not actually acquire enough SpaceX shares to fulfill the backing requirement.
Backpack Securities launched SPCX tokenized SpaceX shares on listing day by sourcing shares directly through its broker-dealer infrastructure. Users who purchased SPCX on Backpack received genuine tokenized SpaceX exposure that the competing xStocks platforms could not deliver.
This distinction matters for Islamic finance because the foundational permissibility argument for all tokenized stocks rests on the genuine 1:1 backing claim. When that backing fails at the moment of actual demand, the fundamental permissibility argument collapses. Backpack's broker-dealer sourcing model demonstrated genuine ability to fulfill the backing requirement even on the most in-demand IPO in history.
Regulatory Clarity
xStocks operate under Swiss and Liechtenstein regulatory frameworks, which are legitimate but less familiar to most investors and less integrated with the mainstream global financial system.
Backpack Securities operates under direct SEC oversight as a registered broker-dealer, within DTCC's existing regulatory authorization framework backed by a December 2025 SEC No-Action Letter. For Muslim investors who value regulatory clarity and institutional accountability, Backpack's regulatory positioning is materially stronger.
The Shariah Board Chairman's Ruling on Tokenized Equities
CoinStudy's Shariah Board Chairman Dr. Mufti Usman Quddus reviewed the xStocks question and provided a ruling that applies to the category of tokenized equities broadly, not just to xStocks specifically.
His ruling, translated from Urdu: "Business with xStocks of halal companies is permissible. Liquidity provision is permissible if it is given for the purpose of partnership and trade and if it is known that your liquidity will be used in a permissible place. Standard DeFi lending of tokenized stocks is not permissible since taking profit on a loan is Haram in Islamic jurisprudence. Referral commission is not impermissible in itself. Its permissibility depends on the product."
Given that Backpack Securities has a structurally stronger backing and legal ownership framework than xStocks, and given that the chairman ruled xStocks of halal companies as permissible, the same ruling applies to Backpack Securities stock holdings with greater confidence where the underlying company passes Islamic equity screening.
The Critical Concern — Backpack's Cross-Margined Account Design
This is the most important section of this analysis and it is where Backpack Securities diverges significantly from xStocks in a way that requires specific and careful attention.
Backpack Exchange operates as a comprehensive crypto financial platform. Its own published materials explicitly describe the vision as follows: on Backpack, users can trade perpetual futures, earn yield through Auto Lend, and manage everything in a single cross-margined account. Adding real equities means traders can hold tokenized stocks alongside BTC and SOL, all within one portfolio.
The cross-margined account design means that stock holdings on Backpack can serve as collateral for perpetual futures positions within the same account. This is not a theoretical possibility that exists somewhere in the broader ecosystem. It is an explicit core design feature of Backpack's integrated platform, marketed as the primary advantage of holding tokenized stocks on a crypto exchange versus a traditional brokerage.
CoinStudy's Shariah Board Chairman has ruled that liquidity provision is permissible only if it is known the liquidity will be used in a permissible place. On Backpack's cross-margined platform, the design explicitly enables stocks to serve as collateral for perpetual futures trading, which CoinStudy classifies as Haram across our entire analysis series, and for Auto Lend yield products.
This means the question for Muslim investors using Backpack Securities is not simply whether the stocks are of halal companies, though that condition must also be met. It is also whether the account structure through which those stocks are held creates an implicit connection to haram financial products that the user does not intend but the platform design enables automatically.
The Auto Lend Concern
Backpack Exchange offers an Auto Lend yield product that automatically lends deposited assets to borrowers on the platform in exchange for yield income.
If a Muslim investor holds stocks or crypto on Backpack and enables Auto Lend, the deposited assets are being used to generate interest-like yield income from lending activity. This is structurally identical to the DeFi lending mechanism that CoinStudy classifies as Haram, with the same concern our chairman identified: taking profit on a loan is Haram in Islamic jurisprudence.
The Auto Lend product is opt-in and can be kept disabled. Muslim investors using Backpack Securities should ensure Auto Lend is disabled on their account and verify that no yield is being generated from their holdings through lending mechanisms.
Which Stocks Are Halal on Backpack?
The permissibility of buying any specific stock on Backpack requires passing two independent layers of assessment.
The first layer is whether the tokenized stock product structure itself is permissible. Based on our analysis above and the chairman's ruling on tokenized equities, Backpack Securities' structure passes this assessment for spot holdings without cross-margin or Auto Lend.
The second layer is whether the underlying company passes standard Islamic equity screening. This is required regardless of which platform is used to purchase the tokenized shares. A company whose business activity is Haram does not become permissible because its shares are tokenized on a blockchain.
Companies that generally pass Islamic equity screening and whose tokenized shares are available on Backpack include technology infrastructure companies like Apple, Nvidia, Microsoft, and Amazon, subject to individual verification of current debt ratios under AAOIFI standards. These companies generate revenue primarily from technology product manufacturing, software services, and cloud computing, which are permissible business activities.
Companies that fail Islamic equity screening regardless of how their shares are tokenized include conventional banks and financial institutions whose primary business is interest-based lending, companies primarily engaged in prohibited industries including alcohol, tobacco, gambling, and weapons manufacturing, and MicroStrategy specifically because its business model is built around acquiring Bitcoin using interest-bearing convertible bonds.
The SpaceX Question — A Specific Case Study
SpaceX is one of the most prominently discussed tokenized stock opportunities in 2026 given the historic scale of its IPO and the genuine interest in space technology among investors globally.
CoinStudy's position on SpaceX stock specifically applies identically on Backpack as it did for xStocks. SpaceX is a private company that has now gone public. As a technology and aerospace company without significant prohibited business activities, SpaceX's business model passes the primary Islamic equity screening criteria for permissible industry involvement.
However the Gharar concern that CoinStudy identified for SpaceX xStocks applies in a modified form even to Backpack's SPCX product. SpaceX as a company is genuinely novel, with a business model that combines aerospace manufacturing, satellite internet services through Starlink, and space exploration infrastructure. The financial modeling uncertainty for a company of this type and scale is inherently higher than for established publicly traded technology companies with decades of financial history.
Additionally SpaceX's stock price performance after its record IPO introduces speculative dynamics. Investors purchasing SPCX on Backpack in the period following the IPO should be honest with themselves about whether the motivation is genuine conviction in SpaceX's long-term business model or speculative interest in riding IPO momentum, since the distinction between investment and speculation carries genuine significance in Islamic finance.
Practical Step by Step Guide for Muslim Investors Using Backpack Securities
The most defensible participation pathway for Muslim investors is clear and specific.
First, ensure your Backpack account has Auto Lend disabled. This is the most important single step. Auto Lend automatically lends your deposited assets for yield income and must be kept off for your holdings to remain in compliance.
Second, verify that cross-margin is not enabled for your stock positions. The cross-margined account feature allows stocks to serve as collateral for perpetual futures positions. Muslim investors should not use this feature and should keep stock holdings in standard account mode without margin activation.
Third, purchase only stocks of companies that pass standard Islamic equity screening. Technology companies like Apple, Nvidia, Microsoft, and Amazon are generally permissible subject to individual ratio verification. Financial sector stocks including banks and insurance companies are not permissible. Companies failing AAOIFI debt ratio thresholds require individual assessment.
Fourth, hold in spot only with no leverage of any kind. Backpack Securities allows leverage products. Muslim investors should purchase stocks at their market price without any margin or leverage component.
Fifth, treat the stock holding as a genuine investment in company ownership, subject to all the scholarly grey area considerations around tokenized equity acknowledged in our full tokenized stocks blog, rather than as a speculation or trading instrument.
Summary Comparison — Backpack vs xStocks
Backpack Securities has stronger custodial infrastructure through DTC custody compared to xStocks' European custodian model. Legal ownership rights are equivalent or stronger under the DTCC-SEC framework compared to xStocks' tracker certificate structure. Regulatory standing is stronger under direct SEC broker-dealer registration compared to xStocks' Swiss and Liechtenstein framework. The SpaceX delivery test demonstrated genuine backing capability that xStocks failed on the most important test case.
However Backpack Exchange as a whole platform creates additional concerns that xStocks does not. The cross-margined account design explicitly connects stock holdings with perpetual futures collateral as a core marketed feature. The Auto Lend product creates automatic yield generation from lending if enabled. The broader Backpack Exchange ecosystem includes perpetual futures trading, leveraged products, and yield services that xStocks' simpler structure avoids.
The net assessment is that Backpack Securities' stock product is structurally cleaner and more credibly backed than xStocks, but the surrounding exchange platform requires more careful navigation by Muslim investors to ensure compliance in practice.
Important Questions for Muslim Investors
Before buying stocks on Backpack Securities, ask yourself honestly.
Have I verified that Auto Lend is disabled on my account and that no yield is being generated from my holdings through lending mechanisms? Have I confirmed that I am not using cross-margin and that my stock holdings are not serving as collateral for perpetual futures positions? Have I verified that the specific company whose stock I am buying passes standard Islamic equity screening independently? Am I buying as a genuine long-term investment in a permissible business or am I speculating on short-term price movement driven by IPO excitement or market momentum? Would I be comfortable explaining my specific account configuration and stock selection to a qualified Islamic scholar?
Final Verdict
Buying and holding stocks of halal companies on Backpack Securities in a spot-only account with Auto Lend disabled and cross-margin deactivated is Halal With Concerns, consistent with the Shariah Board Chairman's ruling on tokenized equities.
The structural backing through DTC custody and SEC broker-dealer regulation makes Backpack Securities one of the most credibly backed tokenized stock products available in 2026. The same ruling our chairman applied to xStocks applies here with greater confidence given the stronger institutional infrastructure.
The concerns are real and specific. The cross-margined account design enables stocks to serve as perpetual futures collateral as a core platform feature. The Auto Lend product creates lending yield if enabled. And every stock selection still requires independent Islamic equity screening of the underlying company regardless of how the shares are held.
For Muslim investors who want genuine equity exposure to permissible companies through blockchain infrastructure, Backpack Securities with the specific account configuration described above represents the most credibly backed and most institutionally robust option currently available.
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Disclaimer: This article is provided for educational and research purposes only. The scholarly ruling referenced reflects our Shariah Board Chairman's existing ruling on tokenized equities. CoinStudy does not issue personal fatwas or financial advice. Please consult a qualified Islamic scholar for individual guidance specific to your account configuration and company selection.