Turkish authorities have detained 13 individuals as part of an ongoing investigation into fintech company Papara, over allegations of money laundering, illegal betting activities, and the formation of a criminal organisation, Interior Minister Ali Yerlikaya announced on Tuesday (May 27) .

According to Reuters, authorities suspect that Papara, an online platform providing money transfers, foreign exchange, and bill payment services to its 21 million users, was facilitating the transfer of illegal betting revenues by allowing users to open accounts for this purpose.

State broadcaster TRT Haber reported that those detained include Papara’s founder and chairman, Ahmet Faruk Karslı.

In response to the investigation, the Savings Deposit Insurance Fund (TMSF) was appointed as trustee to oversee Papara by court order, following reports from the Central Bank of the Republic of Turkey, the Financial Crimes Investigation Board (MASAK), and other relevant bodies.

The central bank, which regulates payment service providers, stated on Tuesday that temporary daily transaction limits would be imposed on the platform.

“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,”

the central bank noted.

The central bank also sought to reassure users, emphasising that, “within the scope of the law, the funds of payment service users in payment and electronic money institutions are secured in protection accounts at banks.”

Yerlikaya added that the authorities have seized 10 companies, bank accounts, and the assets of the detained individuals.

A financial crimes investigation revealed that over 26,000 accounts had been used for illegal online betting activities, with transactions amounting to 12.9 billion lira (approximately US$330 million).

Papara, considered one of Turkey’s leading fintech firms, has yet to issue a statement regarding the matter.

Founded in 2015, the company received its electronic money institution license from Turkey’s banking regulator, BDDK, in 2016.

It expanded internationally in 2023 through the acquisitions of Pakistan-based SadaPay and Spain-based Rebellion Pay.

Featured image credit: Edited by Fintech News Middle East, based on image by wirestock via Freepik