CoinStudy changed Ducat from 88/100 Halal to Haram. What happened and why did the ruling change?

CoinStudy published a preliminary 88 out of 100 Halal classification for Ducat Protocol on August 5, 2026. On August 6, 2026 that classification was revised to Haram following a formal ruling by our Shariah Board Chairman Dr. Usman Quddus. Muslim investors who participated based on our initial verdict deserve a complete and honest explanation of exactly what changed and why.

The initial classification was based on several genuinely strong compliance features. UNIT is backed exclusively by overcollateralized BTC with no US Treasury bills, no bank deposits, and no interest-bearing instruments anywhere in the reserve. There is no ongoing interest on outstanding debt. The debt never grows. There is no maturity date. No late fees. These features distinguish Ducat from every other dollar stablecoin and the Chairman's ruling confirmed they are correct. He stated that the overall Bitcoin-backed system is mostly halal and that the transactions happening through Bitcoin backing are correct.

The specific compliance failure is the 1% origination fee charged as a condition of receiving the loan. Mohammad Wais of ShariaQuant raised this precise challenge: if the fee scales with the principal borrowed rather than with the actual cost of providing the service, and if paying it is a required condition of receiving the loan, it resembles interest even without compounding.

The Chairman's ruling confirmed this analysis directly. His ruling states: the fee charged before obtaining the loan is an extra condition on the loan which makes it resemble Riba. The Muslim finance system does not permit this. He further clarified that Mohammad's objection was correct: the loan will only be received when a percentage fee is paid, and this matter makes it resemble interest.

It is important to understand precisely what the Chairman ruled as correct and what he ruled as incorrect. The Bitcoin backing mechanism is correct. Fees charged for other services within the stablecoin system would be correct. The origination fee specifically as a percentage-scaled condition of receiving the loan is the problem.

This means Ducat could potentially achieve Halal classification if it redesigns its fee structure. A flat fixed fee for vault creation regardless of loan size, or fees for ongoing vault maintenance services separate from the loan itself, could potentially be permissible pending the Chairman's review of any specific modified structure.

CoinStudy immediately removed all Ducat listings, removed the blog post, removed previous Q&A entries, informed the Ducat founder directly, acknowledged Mohammad Wais's correct analysis publicly, and revised the coin analysis the same day the ruling was issued. CoinStudy's founder personally withdrew his own funds from the Ducat vault and publicly apologized to community members who had engaged with the protocol based on the initial verdict.

This revision is not a failure of the process. It is the process working correctly. A preliminary classification was challenged by a qualified scholar. The challenge was submitted to the Chairman. The Chairman ruled. The ruling was followed immediately and publicly. Muslim investors can trust that when CoinStudy publishes a classification it reflects our best current scholarly assessment and that when that assessment changes the revision will be published honestly and immediately.