In this article we do a complete shariah screening of Celcius: CEL Coin to determine if it is a halal or haram cryptocurrency. The short answer is yes, Muslims may trade and invest in CEL crypto, not that it matters now after the recent events but for the record its great to see Muslims in crypto have been against such a project from the outset. Please read on to find out why.
What is Celsius?
The Celsius Network is a market-leading service provider of free alternatives to conventional interest rates for yielding and exchanging fiats on-ramp, and a market-leading provider of CeFi credit. It has led a shift toward a community-based business model, donating 80 percent of its revenue as additional earnings to savers and borrowers.
Celsius Network was created by Alex Mashinksky and Daniel Leon in 2017. The team in charge of Celsius aims to provide a fully community-oriented alternative to traditional financial institutions. In 2018, Celsius raised $50 million from its initial coin offering, and during the following year, development efforts were centered around the launch of the Celsius Wallet.
Users can fund loans denominated in dollars by depositing their coins as collateral, and leverage their crypto to generate income. Since inception, the platform has grown considerably, with the number of active users increasing by over 800 in the first month and growing at an average weekly rate of 3.06 since the start.
Further details can be found on Celsius website.
Is Celsius Halal: Is CEL Halal? We’d Love to Hear Your Thoughts
Sharing the collective wisdom of thousands of Muslim crypto traders and investors.
A retail mobile-only platform – The Celsius Network is only available through the mobile applications.
Borrowing – Users are allowed to withdraw stablecoins and fiat currencies against crypto collateral. Additionally, users are offered a bonus discount by borrowing the CEL token to repay their loans.
A market-leading CeFi lending provider – When cryptocurrency coins are placed with Celsius Network as a guarantee, they can then be lent to another party. In this case, CeFi Financial Institutions, large investors, institutional investors, hedge funds, or exchanges might need reliable ways to enter the world of cryptocurrency.
Legitimacy Screening of CEL
Legitimacy screening ensures that the digital asset is a genuine project and not a scam. The Celsius network is approved by the SEC and requires all members to go through KYC (Know Your Customer) and AML (anti-money laundering) laws. Based on this we can accept that CEL has an underlying fundamental value, that can be considered as “Mal” under Islamic rulings. Therefore, as a project it has legitimacy in terms of Shariah.
Is Celsius project aligned with Islamic values?
No, Celsius does not align with Islamic values and fails project screening. Traditional banking and loaning systems are the foundation of this platform, which include the riba or usury exercise that contradicts with Shariah law.
Financial Screening of CEL:
Financial screening ensures that the crypto asset meets the financial criteria for Shariah compliance, if it is an equity based token. CEL is not backed by any equity, so there is no financial screening required on this coin/ token. Here we would typically look at things like debt to income ratio to ensure borrowing is limited to a tolerable level.
CEL Token Screening for Shariah Compliance
The Celsius Network token (CEL) is an ERC20 utility token that powers the Celsius Network Ecosystem. Users are incentivized to, among other things, use and keep Celsius Network tokens. The tokens utility serves as a medium of the reward system in the form of giving and earning interest. This token should be considered haram.
Is Staking Celsius Halal?
Staking as a concept is not against Sharia guidelines. It’s simply a set of pre-defined rules used by a crypto project to determine who gets the rights to add to the blockchain. It is important to note that every project has its own specific staking mechanism, so we need to assess the staking details to ensure they are Shariah compliant. And of course the underlying crypto asset itself mush to be halal to start off with.
Users may choose to deposit their tokens in their accounts, and their APR will reveal the present demand for that cryptocurrency. In addition, a user may earn interest on their wallets by opting to hold CEL to collect bonuses.
In this case the underlying crypto is based on giving and earning interest so Staking CEL is certainly not Halal.
What Does The Muslim Crypto Community Think of CEL?
Islamic Finance Guru (IFG) believes Celsius: CEL is a haram cryptocurrency based on its method of Shariah complaince screening
Sharlife considers Celsius: CEL as a haram cryptocurrency based on the five areas assessed for Shariah complaince screening.
Crypto Halal Office for Monitoring and Sharia auditing on cryptocurrency markets considers Celsius as a Haram digital asset based on its Shariah complaince screening.
Marhaba DiFi‘s Shariah governance board also beleives Celsius: CEL is a haram crypto and steers Muslims away from it.
If you know of other academic or scholarly views on this, please add in comments and we will update accordingly. Alternatively, you may want to join our community of Muslims crypto investors and traders, to share, learn and profit from halal digital assets.
Is Celsius Halal: Is CEL Halal?
If you have read this far and are still hoping that by some miracle that you can invest in CEL in a halal way, then I’m sorry. You are mistaken. Celcius is a platform that uses standard interest rates to make profit. Clearly, CEL is Haram and should be avoided by Muslim crypto investors.
We hope you found this useful. Please view our Halal Crypto List to find suitable digital asset investments, without compromising your Islamic faith.