Israel-Palestine Conflict: Can Muslims Invest in Cryptocurrencies from Israel?

 

On 18 March 2025, Israel launched a massive airstrike on Gaza after receiving the "green light" from U.S. President Donald Trump. The attack killed over 400 Palestinians, including women and children, while hundreds more were injured. This military action came after negotiations between Israel and Hamas failed to reach an agreement on hostage releases as previously decided.

But what was in the ceasefire agreement, why did Israel attack despite signing it and can we invest in cryptocurrency originating from Israel?

Source: Palestinians inspect the site of an Israeli strike on a residential building in Jabalia, Gaza, on Tuesday. Mahmoud Issa/Reuters

Ceasefire: A Fragile New Hope

After 15 months of continuous war between Israel and Hamas, which had already claimed more than 46,000 Palestinian lives, a ceasefire agreement was finally reached. Known as the “Permanent Ceasefire,” it was announced by then-U.S. President Joe Biden and was scheduled to take effect on 19 January 2025.

The agreement aimed to stop the fighting in Gaza, release hostages from both sides, and ensure Israeli troops withdrew from the area. It was mediated by the U.S., Egypt, and Qatar—countries that frequently act as intermediaries in the Israel-Palestine conflict.

Although it was seen as a small step forward, the deal gave hope to Palestinians and the international community that the cycle of violence could finally end.

Three Phases of the Ceasefire Agreement

The agreement was divided into three key phases:

Phase One:

• Release of 33 Israeli hostages, including women, children, and men over 50.
• Increased humanitarian aid deliveries to Gaza.

Phase Two:

• Started on the 16th day after Phase One.
• Release of all remaining hostages, full Israeli military withdrawal from Gaza, and the enforcement of a permanent ceasefire.

Phase Three:

• Recovery of bodies still unaccounted for.
• Launch of Gaza’s reconstruction, overseen by Egypt, Qatar, and the United Nations (UN).

Despite the agreement bringing hope, many in Gaza remained skeptical, as history has shown that ceasefires rarely last long.

The Collapse of the Ceasefire and New Attacks

Israel’s latest airstrikes on 18 March 2025 were the deadliest since the ceasefire was signed. Within a single day, over 400 Palestinians were killed on those days as reported..

An Israeli official told the Wall Street Journal that the attack was directly approved by President Donald Trump after Hamas failed to release hostages as agreed. White House Press Secretary Karoline Leavitt also confirmed in a Fox News interview that Israel had consulted Trump before launching the assault.

This move reflected Trump’s earlier warning that he would "let hell break loose" if Hamas did not release all hostages.

Why the Ceasefire Collapsed

Many, especially in Gaza, had already expected the negotiations to fail when talks stalled in early February 2025.

• Israeli forces remained stationed along Gaza’s borders, raising tensions and casting doubt on their commitment to the ceasefire.
• Israel imposed strict restrictions on food, fuel, and humanitarian aid deliveries to Gaza, pressuring Hamas to accept alternative proposals.
• During Phase Two negotiations, Hamas insisted that all hostages would only be released if Israel completely withdrew from Gaza and officially ended hostilities.
• Israel rejected this condition, arguing they would continue their attacks until Hamas was destroyed and all hostages were recovered.

With neither side willing to compromise, the ceasefire eventually fell apart, and the war resumed.

Implications and International Reactions

Israel’s latest attack has worsened the humanitarian crisis in Gaza, where hospitals are already overwhelmed and essential supplies are running low.

Internationally, the new assault has drawn widespread condemnation. Countries like Egypt, Turkey, and Jordan have called for an immediate halt to the violence, while the United Nations (UN) has expressed deep concern over the escalating humanitarian disaster.

Can We Invest in Cryptocurrency Originating from Israel?

In general, engaging in transactions with Jews is permissible as long as they adhere to the conditions of a valid sale contract, such as legitimate goods, proper offer and acceptance, and overall compliance with Shariah principles. Imam Nawawi affirmed that scholars unanimously agree on the permissibility of transactions with non-Muslims, but only in matters that are lawful. Any transaction that could contribute to prohibited activities—such as selling weapons to enemies of Islam, supporting the promotion of their religion, or purchasing their religious texts—is strictly prohibited.

At Sharlife, we are dedicated to assessing the Shariah compliance of cryptocurrencies and providing guidance for Muslim investors. In the context of the ongoing Israel-Palestine conflict, we maintain that cryptocurrencies originating from Israel do not meet Shariah compliance standards. While these digital assets may be developed by individuals with diverse backgrounds rather than the Israel government itself, we believe that any economic contribution to Israel indirectly supports its overall economy.

Investing in cryptocurrencies is categorized under hajiyyat (needs) rather than dharuriyyat (necessities). Given this, and to uphold ethical investing principles, we advocate for a collective boycott of Israeli-origin products, including cryptocurrencies developed in Israel. This stance reflects our commitment to solidarity with the Palestinian cause and adherence to Shariah principles, ensuring that our investments align with justice and ethical responsibility.

Conclusion

Reflecting on the words of Prophet Muhammad (peace be upon him):

لَا يُؤْمِنُ أَحَدُكُمْ حَتَّى يُحِبَّ لِأَخِيهِ مَا يُحِبُّ لِنَفْسِهِ 

Means: "None of you [truly] believes until he loves for his brother that which he loves for himself" 

As we consider investment opportunities, we must also ponder: Is it truly worth investing in Israeli crypto while our brothers and sisters in Palestine continue to suffer? Is any potential profit worth the cost of lives and ongoing oppression? Let us come together and reflect deeply on our choices, prioritizing our values and the well-being of our community.