The Legal Implications of Abandoned Digital Assets in Sharīʿah-Compliant Fintech Platforms

Abstract

Purpose — The recent surge in Sharīʿah-compliant fintech platforms has created an increasing volume of intangible digital assets of increasing value across emerging technological platforms. This phenomenon has generated a significant number of digital assets left behind after the demise of their owners. This paper provides a legal analysis of the implications of abandoned digital assets in Sharīʿah-compliant fintech platforms. It seeks answers to two central research questions: what are the Sharīʿah and legal implications of digital assets after the passing of the owner? How can the existing Sharīʿah-compliant fintech platforms prevent uncertainty over digital assets? Design/Methodology/Approach — This is a conceptual paper which adopts a qualitative analysis of both primary and secondary sources from existing journals and regulatory instruments in Islamic finance jurisdictions to explore the gaps in the law regarding digital assets and regulations regarding unclaimed money. The paper further compares the approaches adopted in Malaysia and Saudi Arabia in regulating digital assets and unclaimed moneys. Findings — The paper finds that there is scope for the administration of digital assets in both regulated and unregulated Sharīʿah-compliant fintech platforms. Similarly, the adoption of e-KYC that complies with the Sharīʿah ethos is essential to ensure that digital assets are not lost upon the account holder’s demise. The legal right and title of the account holder and legal heirs can only be protected through the operation of digital assets regulation in a Sharīʿah-compliant fintech environment. Originality — This paper is of value to administrators and legal heirs of account holders in fintech environments. It recommends measures to prevent intestacy and uphold the account holders’ and legal heirs’ intergenerational property rights and financial benefits. Research Limitations/Implications — As a conceptual paper, the attitude of digital asset users is not examined due to the absence of quantitative or qualitative data on devolution of digital assets. Practical Implications — Although this study focuses on the implication of digital assets for Sharīʿah-compliant fintech platforms, the findings may well have a bearing on policymakers, legal practitioners, and administrators of estates in the management of emerging asset classes. Article Classification — Conceptual paper