Is the jewelry with which the cousin was compensated for stolen jewelry permissible, and what is the ruling on the relationship between her and her aunt that was severed because of it?

The obligation to guarantee a borrowed item if it is damaged or lost is a matter of scholarly disagreement. Some scholars hold that the borrower is obligated to guarantee it unconditionally. This is the view of Ahmad and Al-Shafi'i. Others hold that the guarantee is only obligatory if there is negligence, and this is the view of Abu Hanifa and Malik. The preponderant opinion is that the guarantee is unconditionally obligatory due to the

hadiths narrated regarding this, and because the borrower benefited from someone else's property without permission to cause damage. Therefore, what you took in exchange for your gold is your right, while emphasizing the prohibition of severing ties of kinship.