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Turkey’s biggest fintech investigation took another turn after authorities secured the re-arrest of Papara founder Ahmet Faruk Karslı, overturning a court decision that had ended his detention only days earlier.
The Istanbul Chief Public Prosecutor’s Office successfully challenged Karslı’s release before the 11th Heavy Penal Court, which issued a new arrest warrant. The move places the former Papara chief back in custody after nearly a year behind bars and reinforces the government’s increasingly aggressive approach to financial crime linked to illegal gambling.
Papara, founded in 2016, grew into Turkey’s largest digital wallet and one of the country’s best-known fintech success stories. That reputation is now overshadowed by allegations that its payment network was used to process billions of lira in transactions connected to illegal betting operations. Karslı and the company deny any wrongdoing, while the case remains before the courts.
Alleged Betting Network Under Scrutiny
The prosecution argues that Papara’s payment infrastructure became a key channel for illegal gambling payments between 2021 and 2023.
Investigators point to a Central Bank audit identifying more than 26,000 Papara accounts allegedly tied to unlawful betting activity. The indictment claims roughly TRY12 billion, equivalent to more than €250 million, moved through the platform before being distributed across hundreds of bank accounts and several cryptocurrency wallets.
Prosecutors also allege that payment systems connected to Papara were integrated with illegal betting websites, allowing customer deposits to be processed while masking the movement of funds. Those claims remain unproven in court.
Karslı is one of 13 defendants facing charges that include operating or participating in a criminal organization, money laundering, and violations of Turkey’s Law No. 7258 governing illegal betting. Prosecutors are seeking prison sentences of up to 28 years for Karslı and four other senior executives.
A Wider Shift in Enforcement
The Papara investigation has become more than a criminal case. It now serves as a benchmark for Turkey’s tougher oversight of digital finance.
President Recep Tayyip Erdoğan has elevated the fight against illegal gambling into a national priority, expanding enforcement beyond betting operators to include payment companies, financial intermediaries and technology platforms suspected of enabling the industry.
That policy shift accelerated earlier this year when Turkey broadened the authority of the Financial Crimes Investigation Board, known as MASAK. The reforms gave the agency greater responsibility for monitoring suspicious transactions across banking, financial services, insurance and gambling, while strengthening coordination between regulators, prosecutors and law enforcement.
The investigation is also closely associated with Istanbul Chief Public Prosecutor Akın Gürlek, whose office has consistently pursued illegal gambling cases with a hard-line approach, framing them as both financial crimes and threats to public welfare.
For Papara, the contrast is stark. A company once promoted as a symbol of Turkey’s digital economy now operates under state-appointed trustees while prosecutors attempt to prove it played a central role in one of the country’s largest alleged illegal gambling payment networks.
Whatever the courts ultimately decide, the investigation has already altered Turkey’s regulatory landscape. Fintech firms and payment providers are no longer viewed simply as financial infrastructure. They have become central targets in the country’s campaign against illegal gambling.
Source: igamingexpert.com
