Turkish fintech company Papara, which made headlines last year after acquiring Pakistan-based neobank SadaPay, is now facing serious legal scrutiny in Turkey. Authorities have detained 13 individuals linked to Papara as part of a sweeping investigation into alleged money laundering and the formation of a criminal organization, according to a Reuters report published on Tuesday.
The development was announced by Turkey’s Interior Minister Ali Yerlikaya, who stated that the fintech platform was allegedly being used to facilitate the transfer of illicit funds derived from illegal online betting. Authorities discovered that over 26,000 accounts associated with Papara were suspected to have been involved in unauthorized betting operations, collectively transferring a staggering $330 million. These accounts were allegedly created and operated through Papara’s digital financial services infrastructure.
Yerlikaya detailed that Papara provided services such as online money transfers, foreign exchange transactions, and utility bill payments to a user base that has grown to over 21 million. However, investigators claim that the company enabled the creation of accounts used to channel and obscure funds obtained through illegal gambling.
The Turkish state broadcaster TRTHaber reported that the arrests include Papara’s founder and chairman, Ahmet Faruk Karsli. As of the time of reporting, Papara has not issued any public comment on the allegations. Reuters noted that the company was contacted for a statement, but no response was received.
Founded in 2015, Papara quickly established itself as a major player in Turkey’s financial technology sector. The following year, it obtained an electronic money institution license from the Banking Regulation and Supervision Agency (BDDK), allowing it to expand its services and increase its influence in the market.
Papara’s rapid rise also led to its international expansion. In 2023, the company acquired SadaPay, a Pakistan-based Electronic Money Institution (EMI) that has been growing in popularity within South Asia’s digital finance space. At the time of the acquisition, SadaPay issued a statement highlighting the strategic significance of the deal, noting that Papara had built one of the world’s most profitable neobanks. According to SadaPay, the acquisition was set to unlock new opportunities for expansion and innovation, benefiting both the Pakistani and broader regional fintech landscapes.
The recent legal troubles facing Papara, however, cast a shadow over its previously celebrated expansion. The charges of money laundering and criminal facilitation come at a time when regulatory bodies globally are tightening oversight of fintech operations, particularly those involving cross-border digital payments and betting-related transactions.
The case is expected to attract significant attention in both Turkish and international financial circles, especially considering Papara’s growing role in regional fintech ecosystems. The implications for SadaPay and other affiliated companies are still unclear as investigations continue.
As regulatory authorities proceed with their inquiries, the fintech sector will be closely watching how Papara responds to these serious allegations and what potential consequences may emerge for its operations in Turkey and abroad.
