Is It Permissible to Audit Smart Contracts If Some Involve Riba or Speculation?


Hanafi Fiqh

Answered by Mawlana Ilyas Patel

Question

Is it permissible to audit smart contracts if some involve riba or speculation?

Answer

In the Name of Allah, the Most Merciful and Compassionate

I pray you are in good faith and health. Thank you for your question.

If auditing helps a project engage in, facilitate, or optimize riba-based or speculative activities, it would be impermissible. For instance, auditing an interest-based lending contract to enhance its efficiency in charging interest is not allowed. However, if it is ensuring security, preventing hacks, and technical improvements without promoting haram elements, then it would be permissible.

Jabir (Allah be pleased with him) reported that “The Messenger of Allah (Allah bless him and give him peace) cursed the consumer of usury, its payer, its scribe, and its two witnesses, and he said they are all the same.” [Muslim]

Imam Nawawi states, “This prohibition explicitly forbids documenting usurious transactions and serving as a witness to them.” [Nawawi, Sharh Muslim]

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I pray this helps with your question.

Wassalam,
[Mawlana] Ilyas Patel
Checked and Approved by Shaykh Faraz Rabbani

Mawlana Ilyas Patel is a traditionally-trained scholar who has studied in the UK, India, Pakistan, Syria, Jordan, and Turkey. He started his early education in the UK. He went on to complete the hifz of the Quran in India, then enrolled in an Islamic seminary in the UK, where he studied the secular and ‘Aalimiyya sciences. He then traveled to Karachi, Pakistan. He has been an Imam in Rep of Ireland for several years. He has taught hifz of the Quran, Tajwid, Fiqh, and many other Islamic sciences to children and adults onsite and online extensively in the UK and Ireland. He taught at a local Islamic seminary for 12 years in the UK, where he was a librarian and a teacher of Islamic sciences. He currently resides in the UK with his wife. His interest is a love of books and gardening.