Jurisprudence  the Essentials of the Islamic Law

Jurisprudence the Essentials of the Islamic Law

The Jurisprudential Ruling on Cryptocurrency Borrowing in Imami Jurisprudence Case Study: Margin Trading on Binance Exchange

Document Type : Research Paper

Author
Assistant Professor, Department of Law, Hashtroud Branch, Islamic Azad University, Hashtroud, Iran
10.22059/jjfil.2026.411553.669969
Abstract
This research reconstructs the mechanism of margin trading on Binance Exchange and then evaluates it in light of the principles of the chapter on loan in Imami Jurisprudence. The research is descriptive-analytical and a case study. In this mechanism, the user borrows assets by depositing collateral and the debt is settled on his/her responsibility. Risk ratios are always calculated continuously and mandatory liquidation is applied at thresholds. At the same time, the interest on credit or loan is calculated over time and proportional to the amount of debt, added to the debt and taken into account in the settlement. The criterion of usury on loan is derived based on the conditional benefit for the lender and the adequacy of the contractual condition or system requirement and is applied to two scenarios. The buying position is examined by borrowing the tether and the short selling position is examined by borrowing the underlying asset. The result is that time-based interest, which is dependent on the amount and term of the debt, is seen as incompatible with the rule of usury in Imami jurisprudence, since it is obligatory and has priority in settlement. However, collateral and forced settlement, if used solely to secure the debt, are not considered a source of prohibition. Finally, a framework is proposed for distinguishing service fees from the excess of usury.
Keywords

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