On Tuesday, April 14, the digital investment platform Crypto Bridge Exchange (CBEX) suddenly crashed, with reports indicating that investors incurred losses amounting to over N1.3 trillion (≈$822M). The incident ignited widespread reactions, with investors expressing frustration, criticism, and concern. Though the fallout exposed vulnerabilities in the crypto ecosystem, for Muslim investors, it also underscored a timeless truth: a strong Islamic knowledge base is a shield against the trials of time. By grounding financial decisions in the principles of Shariah, Muslims can navigate modern challenges with wisdom, resilience, and faith.
CBEX launched in Nigeria in July 2024 and gained prominence through its scintillating promise of a 100 percent ROI in 30 days to investors. The promise prompted many Nigerians—mostly get-rich-quick oriented, including Muslims—to invest in the platform without considering due diligence. However, a thorough check flagged the platform as a Ponzi scheme initiative. Alarm bells began to ring for the investors, but as the saying goes, 'a stray dog will never hear the trumpet of the hunter,' they failed to listen.
For Muslim investors, the collapse was more than a financial setback; it was a spiritual test. Many had placed their trust in CBEX without scrutinizing its compliance with Islamic principles. The allure of quick profits clouded judgment, leading some to overlook the Shariah prohibition on excessive risk (gharar), speculation, and dealings with unclear or unethical practices.
Notably, many Islamic jurists rose to the occasion, declaring the platform haram due to its nonconformity with the Islamic standard of business transactions. Worth mentioning is the widely circulated verdict of one of Nigeria’s foremost Islamic finance experts, Professor A. A. Alaro, which unequivocally declared both CBEX and PCEX haram base on three cogent stances. In his explanation, the business guarantee of both capital and a fixed percentage of profit proclaims it haram, as this is tantamount to riba, which the Shari'a injunction nullifies. He also mentioned that the platform adopts a Multi-Level Marketing (MLM) strategy, which the consensus of fatwas from Makkah, Egypt, Jordan, and various Muslim nations has declared haram. He concluded that the platform adopts trading in cryptocurrency with particular emphasis on derivatives such as futures, forwards, and options, which are also haram due to their gambling nature. In his final submission, the Professor declared that derivatives are imaginary assets not beneficial to any economy. In fact, this was the reason for the crash of the global economy in 2008 when its market capitalization was said to have reached $600 trillion, while the actual world economy stood at less than $60 trillion.
Nonetheless, this incident should serve as a catalyst for all Muslims around the globe. In order to navigate the ordeal of time and hold firmly to the "rope of Allah," one must be well-grounded in Islamic knowledge. Considering the Islamic legal maxim, "a deep understanding of religion is a shield against the trials of time," it is imperative that everyone tries to seek deep Islamic knowledge on every issue, be it financial, spiritual, or whatever, before moving ahead with it.
In fact, at the height of displaying egocentric ignorance, a Muslim investor in CBEX was seen in a viral video with ihram in Makkah fervently praying for the sustainability of the scheme. It would not be wrong to assume that he came for the ritual from the proceeds of that impure and haram scheme. This neglects the warning of the Prophet that Allah is pure and accepts not except what is pure.
Moreover, the source of Shari'a injunctions should be well scrutinized in these modern times. Nowadays, people assume the role of Islamic jurists without having adequate knowledge to back it up. It was on record that a self-acclaimed female Islamic scholar gave a verdict on the legality of the scheme and also admitted to having a stake in it. This is not in any way strange, as the Prophet has earnestly warned us that towards the end of time, there will emerge callers to the path of destruction.
On this note, we ask Allah to guide us in all our affairs and never to leave us to ourselves, even for a twinkling of an eye. Aameen.
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