HCS Score
85/100
These are absolute prohibitions in Islamic finance. If any red line is triggered, the asset is automatically classified as HARAM.
Riba Exposure
Not an interest-based lending or borrowing protocol
Gambling / Betting
No gambling or betting mechanism
Haram Industry
Not involved in haram industry
The asset is scored across 7 Shariah principles.
Based on Red Line Screening and HCS Scoring.
Halal
This cryptocurrency is evaluated as Halal for investment and use because it shows strong alignment with CoinStudy HCS principles.
Explanation
This asset demonstrates strong Sharia compliance with real utility and transparent financial structure.
Reviewed by
CoinStudy Shariah Board
Ethereum Classic has one of the most principled origin stories in all of crypto.
In 2016, the original Ethereum blockchain suffered a catastrophic hack. A vulnerability in a smart contract called The DAO was exploited, draining approximately $60 million worth of Ether. The Ethereum community faced a choice — roll back the blockchain to undo the hack, or let the hack stand as an immutable record.
Most of the community chose to roll back. They believed protecting users from catastrophic loss outweighed the principle of blockchain immutability. That became what we now call Ethereum.
A minority refused. They believed that "code is law" — that if you build on an immutable blockchain, that immutability must be absolute, even when the outcome is painful. They kept the original, unmodified chain running. That became Ethereum Classic.
That founding principle — uncompromising commitment to immutability and decentralization — still defines Ethereum Classic today. And it has meaningful implications for the Islamic finance assessment.
We ran ETC through the full CoinStudy Halal Crypto Standard (HCS) methodology. Here's the complete picture.
Ethereum Classic passes the CoinStudy HCS Sharia red-line screening with no violations. It scores 85 out of 100 and is classified as Halal. It has genuine smart contract utility, a strong commitment to decentralization, no built-in interest mechanism, and a transparent open-source infrastructure design.
Ethereum Classic is a decentralized blockchain platform that supports smart contracts, decentralized applications, digital assets, and blockchain infrastructure services — operating on the original, unmodified Ethereum codebase that has never been altered since the 2016 fork.
The network supports smart contracts, decentralized applications, blockchain services, digital asset creation, decentralized infrastructure, and Web3 development. ETC tokens are used to pay transaction fees, secure the blockchain through proof-of-work mining, and enable smart contract execution.
One of Ethereum Classic's defining characteristics is its absolute commitment to blockchain immutability and decentralization. The project has maintained the original Ethereum codebase without politically motivated changes — a position that makes it one of the most philosophically consistent blockchain projects in existence.
Ethereum Classic operates as a decentralized blockchain using proof-of-work consensus — the same mining mechanism that Bitcoin uses — rather than the proof-of-stake system that modern Ethereum adopted in 2022.
This design choice is intentional and significant. Proof-of-work provides a different security model — one that doesn't require validators to hold and lock up tokens. Miners secure the network by providing computational work, and the longest valid chain represents the true state of the blockchain.
The ETC coin pays for computation on the network — transaction fees, smart contract execution costs, and network operations. Like Bitcoin and Ethereum, ETC has clear functional utility tied to real network activity rather than speculative financial mechanisms.
Ethereum Classic's founding commitment to immutability deserves specific attention in the Islamic finance context.
Islamic finance places significant value on the sanctity of contracts and the importance of honoring agreements exactly as made. The concept that a contract, once entered, cannot be retroactively modified by any authority — is deeply aligned with Islamic principles around contractual integrity.
Ethereum Classic's insistence that the blockchain record is permanent and unchangeable — even when the outcome is uncomfortable — reflects a similar principle. What is recorded, is recorded. No authority can rewrite history. The blockchain is what it is.
This philosophical alignment between Ethereum Classic's immutability commitment and Islamic finance's emphasis on contractual integrity is genuinely positive from a compliance perspective — contributing to the strong transparency and governance score.
Ethereum Classic provides genuine smart contract and decentralized application infrastructure. The network has attracted development activity across financial applications, tokenized assets, gaming, identity systems, and Web3 services.
The utility score of 8 out of 10 reflects real and functional smart contract capabilities with acknowledgment that Ethereum Classic's ecosystem is smaller and less active than Ethereum's. The same basic smart contract functionality exists — but the developer community, the application ecosystem, and the institutional adoption are more limited.
This is an honest assessment. Ethereum Classic works. Its ecosystem is just less developed than its fork's ecosystem.
Ethereum Classic is not built around lending systems, borrowing markets, fixed-interest products, debt-based finance, or yield-generating financial structures. Its purpose is providing blockchain infrastructure and smart contract functionality.
At the protocol level ETC is completely free from Riba. The score of 24 out of 25 on Financial Exposure Risk reflects this clean core with a small deduction for DeFi ecosystem applications that are independent of the protocol.
Ethereum Classic operates through transparent blockchain technology, publicly verifiable transactions, open-source software, and clearly defined protocol rules. The network has been operating consistently since 2016 — providing a long operational track record that reduces uncertainty meaningfully.
The Gharar score of 12 out of 15 reflects strong technical transparency with deductions for adoption uncertainty and competition from larger smart contract platforms — realistic acknowledgment of the ecosystem challenges Ethereum Classic faces.
Ethereum Classic was not created as a gambling platform. The network focuses on decentralized computing, application hosting, blockchain infrastructure, and smart contract functionality.
Speculative trading in ETC occurs in markets — as with every crypto asset. But the protocol's productive infrastructure purpose is clear and consistently implemented. The Maysir score of 11 out of 15 is consistent with how we assess other smart contract infrastructure platforms.
Ethereum Classic clears every hard red line.
Riba Exposure — ✅ Passed. Not an interest-based lending or borrowing protocol.
Gambling and Betting — ✅ Passed. No gambling or betting mechanism exists.
Haram Industry — ✅ Passed. No involvement in prohibited industries.
Guaranteed Interest — ✅ Passed. No guaranteed interest obligations exist.
Synthetic Interest Products — ✅ Passed. No synthetic interest instruments are present.
No red line violations were found. Ethereum Classic is fully eligible for HCS scoring.
Ethereum Classic is scored across 7 Shariah principles with a total of 100 points.
On Financial Exposure Risk, weighted at 25%, ETC scores 24 out of 25. Clean core protocol with minimal indirect exposure to interest-based products. Small deduction for DeFi ecosystem applications independent of the core network.
On Gharar and Uncertainty, weighted at 15%, ETC scores 12 out of 15. Long operational track record and transparent protocol design reduce uncertainty significantly. Deductions reflect ecosystem growth challenges and competitive position relative to larger platforms.
On Maysir and Speculation, weighted at 15%, ETC scores 11 out of 15. No gambling mechanics in the core protocol. Deductions reflect speculative market trading and some higher-risk applications within the broader ecosystem.
On Underlying Business Activity, weighted at 15%, ETC scores 14 out of 15. Decentralized smart contract infrastructure and blockchain computing services are fully permissible and genuinely valuable activities. Small deduction acknowledging the more limited ecosystem development compared to the project's age and potential.
On Utility and Real Use, weighted at 10%, ETC scores 8 out of 10. Real smart contract utility with functional applications and a working ecosystem — though more limited in breadth and depth than larger competing platforms.
On Tokenomics Fairness, weighted at 10%, ETC scores 8 out of 10. Proof-of-work mining creates a relatively fair token distribution model — miners earn based on computational work rather than stake size. Some concentration in early mining is noted.
On Transparency and Governance, weighted at 10%, ETC scores 8 out of 10. Open-source, publicly auditable, with community-driven governance consistent with the immutability principles the project was founded on. Strong transparency credentials.
Overall HCS Score: 85 out of 100 — Halal
Muslim investors who've read our Ethereum analysis (88/100) will want to understand why ETC scores slightly lower.
Both are halal-rated smart contract platforms. Both pass all Sharia red lines. The three-point difference comes from two areas.
First — ecosystem development. Ethereum has a dramatically larger ecosystem of applications, developers, and real-world deployments. ETC's ecosystem, while genuine and functional, is significantly smaller. This reduces the Utility and Underlying Business Activity scores slightly.
Second — proof-of-work vs proof-of-stake. This is actually more nuanced for Islamic finance purposes. Ethereum Classic's proof-of-work model means no staking yield — which removes any questions about whether staking rewards resemble interest income. Ethereum's proof-of-stake staking creates more complex compliance questions around staking yield. In this specific dimension, ETC's simpler mining model may actually reduce some compliance complexity.
Both are Halal. The scoring difference reflects ecosystem maturity rather than fundamental compliance differences.
Ethereum Classic faces a genuine and significant challenge that Muslim investors should understand clearly.
After the 2016 split, the vast majority of Ethereum developers, users, and institutional interest followed the upgraded Ethereum chain. Ethereum Classic retained the original codebase and principles but lost most of the ecosystem.
Since then, Ethereum Classic has faced multiple network-level 51% attacks — where miners with sufficient hash power temporarily controlled the blockchain and reversed transactions. These attacks exploited the fact that Ethereum Classic has significantly less mining hash power than Bitcoin, making it more vulnerable.
These security events are real concerns. They don't affect Sharia compliance directly — but they do affect the practical trustworthiness of the network for serious applications. Muslim investors should understand that Ethereum Classic's immutability principles, while philosophically admirable, have been practically compromised by these attacks.
A score of 85 is a strong halal rating — comfortably above the halal threshold and genuinely positive. But it's lower than Ethereum at 88, Cardano at 90, or Polkadot at 90.
The reasons are straightforward and honest. Ethereum Classic has a smaller ecosystem, fewer developers, less institutional adoption, and a track record that includes vulnerability to 51% attacks. These are real differences in the quality and reliability of the network — not Sharia compliance issues, but practical investment considerations that are reflected in the scores.
The compliance profile is strong. The investment profile has limitations that responsible Muslim investors should understand.
Before investing in Ethereum Classic, ask yourself honestly:
Do I understand the difference between Ethereum Classic and Ethereum — and why the 2016 fork happened? Am I comfortable with the ecosystem size and developer activity limitations compared to larger smart contract platforms? Do I understand the 51% attack history and what it means for network security? Am I investing based on genuine conviction in the immutability principles — or following market momentum? Is my investment strategy free from speculative trading behavior?
Ethereum Classic rewards investors who understand and genuinely value its specific principles — not those who confuse it with Ethereum or invest based on name recognition.
Ethereum Classic (ETC) is generally considered halal under the CoinStudy Halal Crypto Standard with a score of 85 out of 100.
It functions primarily as decentralized blockchain infrastructure. It supports smart contracts and digital applications. It is not fundamentally connected to interest-based finance, gambling systems, or prohibited financial structures.
The concerns — ecosystem growth challenges, developer adoption limitations, competition from larger platforms, and the 51% attack history — are real and honestly reflected in the score. But they don't constitute Sharia violations. They are investment considerations that responsible Muslim investors should understand clearly alongside the strong compliance fundamentals.
For Muslim investors who value decentralization principles, proof-of-work security models, and immutability commitments — Ethereum Classic is a genuinely Sharia-compatible blockchain infrastructure investment with a distinct and principled identity.
Disclaimer: This analysis is provided for educational and research purposes only. This analysis is based on guidance from CoinStudy's HCS Shariah Board members. CoinStudy does not issue personal fatwas or financial advice. Please consult a qualified Islamic scholar for individual guidance.
Guaranteed Interest
No guaranteed interest obligations
Synthetic Interest Products
No synthetic interest instruments
No Red Line Violations
This asset passed all Sharia red line checks.
Financial Exposure Risk
25%Indirect financial exposure to interest-based & yield products
Gharar / Uncertainty
15%Clarity in contracts and absence of excessive uncertainty
Maysir / Speculation
15%No gambling-like mechanics or high speculation design
Underlying Business Activity
15%The nature of the project's core business is permissible
Utility / Real Use
10%Genuine utility and real economic value
Tokenomics Fairness
10%Fair distribution, no exploitation, sustainable tokenomics
Transparency & Governance
10%Open-source, audited, clear governance structure
