MRHB.Network hosted a YouTube Live discussion about whether implementing Islamic finance could have averted the FTX collapse in November.
Echoing the crypto community, Khalid Howladar, Chairman of the MRHB Advisory Board, was shocked to learn about the FTX collapse, given the participation of many seasoned investors such as Sequoia Capital, SoftBank, Temasek Holdings, and asset management titan BlackRock.
"The fact that sophisticated investors suspended their diligence is very shocking," remarked Khalid.
The lack of regulation was the main criticism of the leverage the trading firm Alameda Research had on the FTX token. The CEO of FTX, Sam Bankman-Fried, owns the trading firm. The disclosure of this information led to investors liquidating their assets and FTX declaring bankruptcy.
MRHB (pronounced 'Marhaba') has brought forth another argument: ethics in crypto.
"There need to be basic things like corporate governance, integrity, trust, audits, and transparency within crypto," said Khalid. "If you remove ethics from business, all you get is greed and corruption".
One key thing that differentiates Islamic finance from conventional finance is the prohibition of the exploitative practice of charging interest in debts, also known as ‘riba’.
It is also forbidden to invest in any business involved in prohibited activities that include but are not limited to gambling, pornography, and the selling of alcohol and pork.
Key in Islamic finance is that financial activities and dealings are held honestly and accountable. Thus, scams and frauds like what happened with FTX could be avoided.
While only in its second year of operation, MRHB has not wasted time building a loyal investor community and launching products with real utility, contributing to ethical DeFi.
Unlike a typical self-custodial crypto wallet, the Sahal Wallet is also the gateway to the entire MRHB ecosystem. Furthermore, all the tokens listed on Sahal have been screened by the Shariah Governance Board (SGB) to ensure that each token or project listed is halal and not involved in interest-based dealings.
The SGB comprises Shariah scholars who are experts in Islamic finance and cryptocurrency. They ensure that all MRHB products and the activities related to them are halal.