Explained: Why a Pakistani cleric issued fatwa against crypto trading and why it is spooking investors

Mufti Usmani, chair of the Shariah Board of Bahrain-based AAOIFI, has issued a fatwa declaring cryptocurrency trading illegitimate under Islamic law, triggering pockets of panic selling among religious investors in Pakistan, India and the UAE. Bitcoin was trading marginally lower at $64,555 and Ether was down about 1 percent on Thursday, though both had gained over 4 percent and nearly 11 percent respectively in the previous week. The ruling complicates Pakistan's ambitions to become a regional crypto hub, with its virtual assets regulator seeking guidance to distinguish speculative cryptocurrencies from asset-backed digital tokens.