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Turkish prosecutors have extended an assault on the nexus between payments companies and online gambling, detaining the mogul behind the rising fintech company Papara and 12 other suspects.
Interior minister Ali Yerlikaya announced on Tuesday (May 27), after police raids earlier in the day, that Papara is suspected of facilitating and illegal online betting and money laundering, and establishing a criminal organisation.
The raids followed probes into Papara by the Financial Crime Investigation Board (MASAK), the central bank and other agencies, part of a wider investigation that snared three Papara rivals in March.
State-owned media outlet TRT Haber reported that Papara chairman, founder and former CEO Ahmet Faruk Karslı is among those detained in the raids. It was not immediately clear if other Papara executives are in custody.
The Istanbul Chief Public Prosecutor’s Office said the company “is systematically and intensively used in the commission of illegal betting crimes, and … facilitates the commission of this crime and the transfer of money in the commission of the crime”, the state-run Anadolu Agency reported.
In addition to a court appointment of the Savings Deposit Insurance Fund (TMSF) to temporarily manage the company, which boasts more than 23m users and 8m Papara card users, the authorities seized assets of the parent company and those of at least nine other companies.
The asset seizure totals 5bn lira ($128m), including personal bank and cryptocurrency accounts, real estate, 74 vehicles, yachts, boats and other luxury items.
Daily transaction limits have been imposed on the Papara payments platform for an indefinite period.
“In this process, which will be carried out in coordination with the relevant institutions, temporary daily limits will be applied to payment transactions at the institution,” Reuters quoted a central bank statement as saying.
The MASAK, central bank and other probes alleged that Papara accounts were freely connecting to illegal online betting operations in collaboration with company officials, and that Papara had collected fees from operators at various stages.
The reports alleged 26,000 Papara accounts were linked to online gambling sites and had generated 12.9bn lira ($330m) in transactions.
Papara, founded in 2015, has been licensed to operate electronic money transfers since 2016, launched a Mastercard-branded prepaid card in 2017, and expanded operations into Spain in 2023 and Pakistan last year by acquiring, respectively, Rebellion Pay and SadaPay.
Turkey has been placing heavy pressure on the payments industry this year, with the central bank suspending the licences of local digital payment platforms PayFix, Ininal and Aypara in March.
The suspensions followed the detention of 59 suspects, including PayFix owner and media boss Erhan Kork.
As with Papara, the three companies are accused by MASAK and the central bank of facilitating illegal online gambling and money laundering.
