The growth of fintech startups in the Islamic finance industry has revolutionized financial services delivery within a Sharia-compliant framework. These startups leverage technology to develop innovative solutions that adhere to Islamic principles, addressing customer demands for ethical and inclusive financial practices. This paper examines the accounting and regulatory challenges fintech startups face in the Islamic finance industry, including Sharia compliance, risk management, and regulatory adherence. By integrating blockchain and artificial intelligence technologies, these startups have the potential to enhance transparency and operational efficiency. The findings offer actionable insights for regulators, practitioners, and academics to navigate this evolving sector.