Turkish authorities have detained 13 people as part of an investigation into Papara, one of Turkey’s leading fintech companies. The probe is focused on money laundering, illegal online betting, and the formation of a criminal organization, according to Ali Yerlikaya, Turkey’s Interior Minister.
Papara, which offers digital financial services like money transfers, foreign-exchange transactions, and bill paymentsto 21 million users, is accused of allowing users to open accounts for transferring funds related to illegal betting activities. Ahmet Faruk Karsli, the company’s founder and chairman, is among those detained in connection with the investigation.
Why SadaPay is Involved
Papara has been expanding internationally in recent years, and in 2023, it acquired Pakistan-based fintech company SadaPay. This acquisition has brought additional attention to Papara’s operations, as SadaPay was seen as a key part of its international growth strategy. The ongoing probe into Papara could also affect its operations, including those involving SadaPay.
Regulatory Actions and Financial Seizures
In response to the investigation, a court-appointed trustee from the Savings Deposit Insurance Fund (TMSF) has been assigned to oversee Papara’s operations. The decision follows reports from Turkey’s central bank, the Financial Crimes Investigation Board (MASAK), and other relevant authorities.
To prevent further illicit transactions, the central bank has implemented daily transaction limits on Papara’s platform. Despite these measures, the central bank assured users that their funds are secure in protected accounts in accordance with Turkish law.
As part of the investigation, authorities have seized bank accounts, assets, and 10 companies linked to the detained individuals.
Illegal Betting Scandal: Billions at Stake
Turkey’s financial crimes unit revealed that over 26,000 accounts on Papara were used to facilitate illegal online betting. The total value of these illicit transactions amounted to 12.9 billion lira (approximately $330 million).
Papara’s Response
Papara has yet to respond to requests for comment on the investigation or the detentions. As the investigation progresses, the company faces increasing scrutiny that could affect its operations both in Turkey and internationally.
