Is farming Binance Alpha Points by rapid buying and selling halal when some boosted tokens belong to interest-based lending projects?

Our Shariah Board Chairman Dr. Usman Quddus, PhD in Islamic Studies and Finance, reviewed all four questions and issued the following direct ruling:

Question 1: Buying and selling in interest-based projects is not permissible.

Question 2: If a buyer is trading in halal coins and a haram coin appears in between, they can abandon the benefit to the extent of the haram and save the remaining capital.

Question 3: This question is connected to the previous question. It is necessary to abandon the benefit to the extent of the haram. It is not necessary to abandon all the benefit.

Question 4: In the digital market, repeated buying and selling continues. Some projects' systems are built specifically for this purpose. Therefore there is no deception in this and trading in it is permissible.

Explanation:

Our Shariah Board Chairman Dr. Usman Quddus has issued a formal ruling on all four of your questions. Here is each ruling explained precisely.

On Question 1, the ruling is direct and unambiguous. Buying and selling tokens of interest-based lending projects is not permissible regardless of holding duration, investment intent, or the purpose of the transaction. The chairman did not qualify this ruling with any exception for momentary holding or for the absence of investment intent. Your own instinct that the screen applies in full was correct. When a token's underlying business is interest-based lending, no transaction in that token is permissible under Islamic finance principles. The one-minute holding period and the points-farming motivation do not change what the token is or what the transaction creates.

On Question 2, the ruling is more nuanced and more generous than a strict reading would suggest. The chairman ruled that if you are trading halal coins and a haram coin appears during the cycle, you can abandon the benefit to the extent of the haram element and save the remaining capital. This is a specific and important ruling for your practical situation. You do not need to abandon the entire points cycle because a haram token appeared. You stop trading that specific haram token, abandon the benefit attributable to it, and continue building points through halal tokens only. The remaining capital that was never deployed into the haram token is preserved and can continue working in permissible tokens. The already-incurred loss from gas and slippage on permissible tokens prior to the haram token appearing does not require you to abandon everything. Bear the loss on the haram token's portion, protect the rest.

On Question 3, the chairman connected this directly to Question 2 and ruled that abandoning benefit to the extent of the haram is necessary but abandoning all benefit is not necessary. This confirms the proportional approach. Purifying the proportion of points attributable to haram token transactions is the correct course rather than rejecting the entire airdrop. Calculate honestly what percentage of your total accumulated points came from transactions involving haram tokens. That proportion requires purification by donating the equivalent value to charity without expectation of reward. The remaining proportion from halal token transactions is permissible to keep.

On Question 4, the chairman's ruling is a meaningful permission for Muslim investors who want to engage with this strategy on permissible tokens. In the digital market, repeated buying and selling continues and some projects' systems are built specifically for this purpose. Therefore there is no deception and trading in it is permissible. The chairman addressed the wash trading and Bay al-Inah concerns directly by noting that when a project's system is designed for this activity there is no deception involved. The Binance Alpha programme designs its incentive structure around volume accumulation, making this activity transparent rather than deceptive. For tokens that pass CoinStudy's Halal Crypto Standard, rapid buying and selling to accumulate Alpha Points is permissible.

The practical guidance from all four rulings combined is as follows. Identify which Binance Alpha boosted tokens pass CoinStudy's Halal Crypto Standard and limit your rapid cycling to those tokens only. When a haram token receives a boost, do not participate in that token's cycle. If a haram token appears mid-cycle after you have already been cycling permissible tokens, stop at the haram token, calculate the proportion of your points attributable to any haram transactions you may have already made, and purify that proportion from your eventual airdrop. The permissible portion of your points from halal token transactions is yours to keep and the rapid cycling strategy itself is permissible when applied to halal tokens.

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