Introduction to Turkey’s Fintech Crackdown
Turkey’s central bank has taken a drastic measure against İstanbul-based electronic money and payment services company Papara. Following an investigation into alleged involvement in illegal betting activities, the central bank revoked Papara’s operating license. This decision was published in the Official Gazette, stating that the company’s authorization to operate as an electronic money institution had been canceled under specific articles of Turkey’s law regulating payment systems.
Background of the Investigation
Papara, one of Turkey’s largest fintech firms, has been under investigation since May for allegedly facilitating illegal online betting. The probe led to the arrest of 11 people, including the company’s founder and CEO, Ahmed Faruk Karslı. Four other suspects were released after questioning. The investigation accuses the suspects of running an organized crime network involved in illegal gambling, money laundering, and membership in a criminal organization.
Allegations Against Papara
Prosecutors allege that Papara’s systems were used to facilitate financial transactions linked to illegal betting operations. Assets belonging to 10 companies, including Papara Holding A.Ş., have been seized, and access to suspects’ bank and cryptocurrency accounts have been blocked as part of the investigation. Confiscated assets also include six boats, 74 vehicles, and eight properties, with the total value estimated at around 5 billion Turkish lira ($155 million).
Impact on Papara’s Operations
As part of the investigation, an İstanbul court appointed the Savings Deposit Insurance Fund (TMSF) as a trustee to oversee the 10 companies, including Papara Holding A.Ş. According to the Financial Crimes Investigation Board (MASAK), 26,012 Papara accounts were allegedly used for illegal betting transactions totaling nearly 12.9 billion lira ($306.2 million). In early June, Papara told its customers that their balances were temporarily inaccessible due to an ongoing review, adding that restrictions would be lifted gradually for accounts found to be unrelated to the investigation.
Business Repercussions
The investigation into the company has had significant business repercussions. Fenerbahçe Sports Club ended its sponsorship deal with Papara on June 4. Papara is one of Turkey’s leading financial technology firms, offering electronic money and payment services to over 23 million individual users and 14,000 merchants. The company employs more than 1,000 people and has over 8 million Papara cardholders.
Papara’s History and Achievements
Founded in 2015, Papara has been a licensed electronic money institution since 2016. The company joined Visa’s global partner network in 2019 and has been featured twice on the Global FinTech 100 list of KPMG. Founder Karslı served as CEO from 2020 to 2022 and resumed the role in February 2025. Papara had high-profile sponsorship deals with major Turkish sports clubs, including Trabzonspor, Fenerbahçe, and Beşiktaş.
Conclusion
The operation against Papara is the latest in a series of high-profile investigations into financial institutions and digital platforms accused of enabling illicit activities in Turkey’s expanding fintech and online gaming sectors. This crackdown highlights the importance of regulatory oversight in the fintech industry, ensuring that companies operate within the bounds of the law and do not facilitate illegal activities. As the investigation continues, it remains to be seen how Papara will recover from this significant setback and what implications this will have for the broader fintech industry in Turkey.
