Towards Clearer Crypto Regulation: An Ethical Analysis for the Muslim Investor
The world of cryptocurrencies, often perceived as a digital Wild West, may be on the verge of a major transformation. A bipartisan bill, recently unveiled by the U.S. Senate Committee on Agriculture, seeks to outline a more structured and secure digital asset market [1]. This initiative, led by Senators John Boozman and Cory Booker, represents a decisive step towards the widespread adoption of cryptocurrencies by both financial institutions and the general public. For the Muslim investor, who navigates this ecosystem with a rigorous ethical compass, this new regulatory era raises a fundamental question: does a clearer framework make investing in cryptocurrencies more compliant with the principles of Islamic finance? This text proposes to analyze the key points of this bill and evaluate its ethical implications, particularly concerning the concepts of Gharar (uncertainty), Riba (interest), and Maisir (speculation).
The Pillars of the New American Crypto Regulation
The bill, the result of extensive work, is structured around several major axes aimed at establishing a climate of trust and stability. These measures, if adopted, could profoundly redefine the digital asset landscape.
Classification and Clarification of Asset Status
One of the most significant advances in this text is the classification of some of the largest cryptocurrencies, such as Bitcoin (BTC) and Ethereum (ETH), as "digital commodities." This designation places them directly under the jurisdiction of the Commodity Futures Trading Commission (CFTC), the regulatory body for commodity markets in the United States. Juan Leon, an analyst at Bitwise, emphasizes that this clarification "provides the legal certainty required to move assets into a formal, strategic allocation" [1]. By moving out of regulatory ambiguity, these assets become more easily accessible to institutional investors, who now have a clear legal framework.
Segregation of Funds and Prevention of Conflicts of Interest
Echoing the scandals that have shaken the industry, such as the FTX affair, the bill imposes a strict separation of different functions within cryptocurrency companies. The "all-in-one" model, where the same entity acts as an exchange, broker, custodian, and proprietary trading desk, would thus be called into question. This requirement for the segregation of activities aims to prevent conflicts of interest and to ensure that client funds are managed transparently and securely, similar to the practices in traditional finance.
Listing Standards to Protect Investors
To combat fraud and market manipulation, the bill proposes to establish strict listing standards. Exchanges would only be authorized to list digital assets that are "not readily susceptible to manipulation" [1]. This measure aims to clean up the market by weeding out dubious projects and the infamous "rug pulls" (scams where developers disappear with investors' funds), thereby strengthening investor protection and overall confidence in the ecosystem.
The Strengthened Role of the CFTC and Collaboration with the SEC
The bill marks a turning point in the American regulatory dynamic by granting a leading role to the CFTC. After years in which the Securities and Exchange Commission (SEC) has been the main de facto regulator of the industry, this text proposes a clearer division of roles and enhanced collaboration between the two agencies. The CFTC is entrusted with the supervision of "digital commodities," while the SEC would retain its jurisdiction over assets qualified as "securities." This new regulatory architecture, which also includes the possibility for the CFTC to collect fees from regulated entities to finance its supervisory missions, aims to create a more coherent and effective framework.
Ethical Analysis for the Muslim Investor
The arrival of stricter regulation is particularly interesting news for the Muslim investor, whose decisions are guided by ethical principles aimed at promoting justice, transparency, and fairness.
Reduction of Gharar (Excessive Uncertainty)
Gharar, or excessive uncertainty, is one of the main obstacles to investing in cryptocurrencies for many Muslims. The absence of a legal framework, extreme volatility, and the lack of transparency of many projects create an environment where risk is difficult to quantify. The American bill, by clarifying the status of assets, imposing clear operating rules on platforms, and combating manipulation, directly contributes to reducing this Gharar. Clear regulation transforms a part of the unknown into a measurable risk, which is an important step towards more ethical investment.
Transparency and the Fight against Illicit Practices
Islamic finance prohibits investments in illicit activities. The pseudonymous nature of some cryptocurrency transactions has sometimes been associated with reprehensible activities. By imposing compliance rules (particularly concerning the fight against money laundering, a point that still needs to be detailed in the final version of the text) and by requiring greater transparency from market players, regulation promotes a healthier ecosystem. The segregation of funds, for example, assures the investor that their assets are not being used without their knowledge for speculative or risky operations, which is in perfect adequacy with the principle of capital preservation.
Maisir (Speculation) and the Nature of the Asset
Maisir, which is akin to gambling, is forbidden in Islam. While speculation is inherent in many markets, including that of cryptocurrencies, the question is whether the investment is based on intrinsic value or on a simple bet. By classifying Bitcoin and Ethereum as digital commodities, the law recognizes their utility and their place in the digital economy, beyond their simple speculative value. This recognition, coupled with a better understanding of the fundamentals of these projects, allows the investor to base their decision on a rational analysis rather than on a simple hope of quick gain, thus distinguishing it from Maisir.
Conclusion
The bill on the structure of the digital asset market in the United States is much more than a simple administrative formality. It is a bold attempt to civilize a digital frontier, to make it safer and more accessible to all. For the Muslim investor, this evolution is particularly positive. By reducing uncertainty (Gharar), increasing transparency, combating manipulation, and clarifying the nature of assets, this regulatory framework further aligns cryptocurrency investment with the principles of ethical finance. Although the legislative path is still long and gray areas remain, particularly concerning decentralized finance (DeFi), the direction taken is clear: that of greater maturity. This maturity is an essential condition for cryptocurrencies to one day find their full place in an ethical and responsible investment portfolio.
References
[1] Napolitano, L. (2025, November 11). Five takeaways from the release of a much-awaited crypto market structure bill. CNBC. https://www.cnbc.com/2025/11/11/five-takeaways-from-the-release-of-a-much-awaited-crypto-market-structure-bill.html