Is it obligatory to dispose of ill-gotten wealth after sincere repentance?
Scholars differ regarding dealings with one who possesses ill-gotten wealth. It is disliked for a Muslim to borrow from or eat from his ill-gotten wealth, or to purchase anything with it. Imam Al-Shafi'i held the view that it is disliked to trade with someone whose wealth is mostly from usury or illicit gains, yet he does not invalidate the transaction, because such individuals might also possess lawful wealth, and because unlawful dealings are only prohibited if it is known that the object of the contract or the price is unlawful. Based on this, you erred in borrowing from a person whose money is unlawful, unless you were compelled to do so, and this does not affect the lawfulness of your own money. You must be sincere in repentance and perform good deeds.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
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