The crypto sector was shaken by the recent Bybit attack, which caused the exchange to lose $1.5 billion on February 21, 2025. The Bybit attack has been marked as one of the most significant exploits in crypto history, surpassing all previous big hacks and attacks. This incident underscores the urgent need for stronger compliance measures, investor protection, and ethical finance models. The Lazarus Group, the notorious group behind some of the biggest heists in crypto, is behind the attack, and the group has already started converting the stolen ether into Bitcoin via mixers and DEXs.
While the attackers are becoming more sophisticated each day, most crypto projects lag in regulations, compliance, audits, and investor protection. The crypto sector saw a wave of zero-utility memecoins in 2024, and most of the investor motives were focused on short-term gains and speculation. The result? There’s a dearth of legitimate projects that hold practical usability. many newer projects have raised concerns around transparency, with only a handful—like Caiz—building toward long-term, ethical infrastructure.
Worldwide, millions of people and thousands of businesses use cryptocurrencies as a payment or investment mode. As the adoption number grows, concerns about the safety and sustainability of funds, ethical and environmental considerations behind a project, and the real-world utility of cryptocurrencies will become paramount.
CZ, the ex-CEO of the world’s largest exchange, Binance, said, “Unpopular opinion: In crypto, too much money is spent chasing small, quick gains. Focus on ethical teams that build for the long term. Big money is built slowly with stamina.”
The word ‘ethical’ can have multiple connotations. But what does it imply in financial terms, especially in the context of crypto, and can it be the panacea for most of the sufferings the crypto sector faces today? Let’s find out.
What is Ethical Finance?
Ethical finance is all about inclusion, fairness, transparency, and equity — and it could be the answer to the speculative nature of traditional financial markets.
Ethical finance is a term used to describe those kinds of finances which, apart from focusing on financial return, also give importance to environmental, social and governance factors commonly known as ESG factors.
Here’s a cheat sheet from the European Federation of Ethical and Alternative Banks (FEBEA) you can use to gauge whether an investment/financial service is ethical or not:
- No acceptance of money coming from speculative, illegal, or polluting activities.
- The lending activities should cater to weaker sections of society (social and economic) and focus on positive societal, environmental, and economic impacts.
- The money management should be transparent.
- Information symmetry should exist between the platform/institution and the customer.
- Profit should not be the only motive for any financial service.
- A portion of the profits must be reinvested in social and charitable causes.
Ethical finance is a modern concept that shares principles with Islamic finance, which has existed for centuries. Islamic finance focuses on Sharia principles and strictly prohibits interest-based activities, speculation, and gambling, ensuring financial practices align with religious values.
Can Ethical Finance Achieve the Center Stage in the Crypto Industry?
Many of the investors still consider crypto to be a casino. You dump in money and cash out quickly with huge gains without having any idea about the project you invested in. However, this notion doesn’t apply to consumers who uphold ESG (Environment Sustainability Governance) values.
ESG considerations require projects to have objectives beyond mere financial gains, incorporating sustainability and good governance as part of their business foundation. This approach aligns with the centuries-old principles of Islamic finance that many Muslim communities follow, which strictly prohibit engaging in unethical or speculative, interest-based investments without real use cases. This is one of the major reasons why nearly half of the 2 billion Muslim population remains traditionally unbanked and avoids speculative crypto projects.
However, as governments become more aware of the inevitability of crypto as a financial services sector alongside traditional finance, many laws and regulations are underway. KYC (Know Your Customer) and AML (Anti-money laundering) procedures should be mandatory. There should be checks on funding sources and how the user funds are used. Besides, data security acts like GDPR should be complied with.
Projects like Cardano, Bitcoin, Avalanche, Caiz, Chia, Algorand, etc., are doing considerably well when it comes to compliance and responsible finance. However, Caiz makes special provisions to encode ethical finance in its infrastructure itself.
Built on ethical finance principles, Caiz sets a new standard for compliant and secure crypto platforms. As the world’s first Fiqh-compliant platform, it combines decentralized and centralized layers to ensure transparency, traceability, security, and immutability of transactions while verifying that funding sources are Sharia-compliant and come from legitimate origins. Its smart contracts also automate KYC, KYB, and AML compliance, enhancing user protection.
To further strengthen its security, Caiz partners with industry leaders like CertiK, Ledger, and Elliptic, ensuring a robust, bug-free, and compliant ecosystem. Unlike other projects, Caiz is a home to several ethical and Sharia-compliant financial products, enabling trusted, transparent, and fair financial services accessible to communities worldwide.
Similarly, Cardano, though progressing slowly, is built on peer-reviewed research. The changes are gradual, with no compromise on security and transparency. Ethereum is also moving towards sustainability and scalability. Bitcoin remains the foundation of decentralized finance, often cited as the most trustless and transparent system in crypto.
Ethical Finance is The Key To a Sustainable Crypto Sector
CZ’s quote points to the larger problem in the crypto sector,i.e., the unpredictability and unethicality that come with speculative assets. Hype-led projects are bound to fade at some point in the future. The bubble would burst, markets would crash, and investors would lose their hard-earned money.
Hacks like the Bybit attack are externalities that need provisions for severe punishment, but scammy projects should meet the same fate. Projects like Caiz set standards for an ethical finance project’s function within the crypto sector. Crypto projects should focus on long-term growth and sustainability and stick to their mission statement. Infact, for a truly inclusive, fair, and balanced crypto sector, projects need to prioritize long-term growth and sustainability while staying true to their mission. That’s the key to building a system that promotes financial inclusion and economic empowerment.
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