Heter Iska
Coinbox operates in accordance with a Heter Iska issued by the Keter Institute for Torah Economics.
Keter Institute for Torah Economics
The Keter Institute (Economy and Torah) is a leading body in the field of Halachic economics in Israel. The institute issues Heter Iska permits to financial institutions, companies and organizations that wish to operate in accordance with Torah law and avoid the prohibition of interest (Ribbit).
What Is an 'Iska' in Halachic Context?
According to Halacha (Jewish law), it is forbidden for a Jew to charge interest from another Jew. An 'Iska' is a Halachic mechanism that transforms a transaction from a loan (subject to the interest prohibition) into a business partnership. In this way, the profit received is not interest but rather a share of the partnership's profits.
How Does the Arrangement Work?
The Heter defines that half of every amount transferred between the parties is considered a 'loan' and the other half a 'deposit' (investment). The interest prohibition applies to the loan portion, but on the deposit portion, which is essentially a joint investment, sharing profits is permitted. In this way, all trading, deposit and withdrawal operations at Coinbox are conducted in accordance with Torah law.