Compilled By: Mallam Musa Olayinka
Ponzi schemes—fraudulent investment operations that pay profits to earlier investors using the funds of newer participants—are not new. Though branded with the name of Charles Ponzi, a notorious Italian fraudster of the 1920s, the reality is as ancient as greed itself.
While some may fall victim out of naivety, many are driven by unchecked desire for quick wealth. These schemes operate on the principle of “robbing Peter to pay Paul,” a model that, in Islam, is clearly categorized as zulm (oppression), gharar (deception), and eating wealth unjustly—all of which are forbidden in the Shariah.
1. CONSUMING WEALTH UNJUSTLY IS PROHIBITED
“O you who have believed, do not consume one another’s wealth unjustly but only [in lawful] business by mutual consent…”
Surah An-Nisaa (4:29)
Ponzi schemes violate this divine principle because:
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They lack clarity and transparency (gharar),
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They are not based on lawful, productive trade (tijarah),
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Participants often consent under misleading or false pretenses.
In essence, the gains of a few come at the loss of many—a model built on falsehood (baatil) and injustice.
2. GREED AND THE LOVE OF WEALTH
“And you love wealth with immense love.”
Surah Al-Fajr (89:20)
The Prophet ﷺ warned:
“Two hungry wolves let loose among sheep are not more destructive than a man’s desire for wealth and status is to his religion.”
(Tirmidhi – Hasan Sahih)
Ponzi schemes thrive because they exploit our craving for quick, effortless wealth. Logic is cast aside, and Shariah is overlooked in the pursuit of “doubling money overnight”—a clear red flag for every believer.
3. DECEPTION (GHARAR) AND GAMBLING (MAISIR)
Ponzi schemes operate under layers of uncertainty:
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You don’t know who’s funding your profit,
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You can’t predict its collapse,
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There’s no genuine economic activity
This is the definition of gharar, which the Prophet ﷺ forbade:
“The Messenger of Allah forbade the sale that involves gharar (uncertainty or ambiguity).”
(Muslim)
Additionally, many such schemes resemble gambling (maisir): speculative, unjust, and zero-sum.
“Indeed, intoxicants, gambling… are abominations of Shaytaan’s handiwork. So avoid them that you may be successful.”
Surah Al-Maa’idah (5:90)
4. HONESTY AND TRUST IN TRADE
“And give full measure and weight in justice…”
Surah Al-An’aam (6:152)
The Prophet ﷺ said:
“The honest and trustworthy merchant will be with the Prophets, the truthful, and the martyrs.”
(Tirmidhi)
Ponzi schemes run on lies, fabricated testimonials, and false promises. They manipulate others for personal gain—behaviors that mirror hypocrisy, not righteousness.
5. RESPONSIBILITY IN FINANCIAL DEALINGS
The Messenger of Allah ﷺ said:
“It is enough of a sin for a man to lie to acquire wealth.”
(Ahmad)
And:
“Whoever cheats us is not one of us.”
(Muslim)
Even if someone joins a Ponzi scheme “just to benefit before it collapses,” they are complicit in the deception. Claiming ignorance does not excuse participation in injustice.
6. THE ISLAMIC APPROACH: PATIENCE, EFFORT, AND HALAL INCOME
Islam teaches:
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Hard work is noble. Quick-money promises that bypass labor are dangerous illusions.
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The Prophet ﷺ made du‘a:
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“O Allah, make the sustenance of Muhammad’s family sufficient and simple.”
(Bukhari & Muslim) -
Real success comes through halal means, not shortcuts steeped in lies.
CONCLUSION: AVOIDING THE TRAPS OF GREED
Ponzi schemes are:
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Rooted in greed,
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Sustained by deception,
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And fueled by exploitation.
They oppose multiple Islamic principles from the Qur’an and Sunnah. Every Muslim must steer clear of them and warn others with wisdom and clarity.
“And whoever fears Allah—He will make for him a way out. And will provide for him from where he never expected.”
Surah At-Talaaq (65:2–3)
Put your trust in Allah’s halal provision, not in the deceptive traps of Shaytaan.
Compilled By: Mallam Musa Olayinka
