Turkish authorities appear unrelenting in their bid to prosecute one of the country’s most high-profile financial crime convictions, as Ahmet Faruk Karslı, the founder and former CEO of fintech and neo-bank Papara, was re-arrested just days after a court had ordered his release.
The Istanbul Chief Public Prosecutor’s Office successfully appealed Karslı’s pre-trial release before the 11th Heavy Penal Court, which issued a fresh arrest warrant for the tech figurehead. The ruling overturned a decision made on 7 July that had ended Karslı’s detention after almost a year in custody.
Founded in 2016, Papara became Turkey’s largest digital wallet and neobank, serving millions of customers and establishing itself as one of the flagship companies of Istanbul’s technology sector. Its rapid growth made it a symbol of Turkey’s digital economy, attracting investment and helping drive the country’s transition towards cashless payments.
High Profile Arrest
Founder Karslı was widely regarded as one of the leading figures in Turkey’s fintech sector, having transformed Papara into the country’s largest digital wallet and a flagship of its technology industry.
However, allegations surrounding Papara’s payment infrastructure have persisted since 2024. Investigators increasingly focused on whether the platform had become a conduit for illegal gambling transactions, with prosecutors now alleging that it formed the backbone of one of the largest illicit payment networks uncovered in Turkey’s financial system.
According to a Central Bank audit cited in the indictment, 26,012 Papara accounts were linked to illegal betting activity between 2021 and 2023. Prosecutors allege that approximately TRY12bn (+€250m) in transactions flowed through the platform before being transferred to 274 bank accounts and five cryptocurrency wallets.
The prosecution further alleges that Papara’s payment systems were integrated with illegal gambling websites, allowing betting operators to process customer deposits while concealing the origin and destination of funds. Karslı and Papara have denied any wrongdoing, and the allegations remain before the courts.
The scale of the alleged operation is widely viewed as one of the events that prompted President Recep Tayyip Erdoğan to elevate the eradication of illegal gambling into a national political priority. Presenting the issue as one of organised crime, financial security and the protection of Turkish families, Erdoğan pledged a comprehensive crackdown targeting not only illegal betting operators but also the payment providers, technology platforms and financial intermediaries accused of facilitating the sector.
That strategy has increasingly focused on financial oversight. In February, Turkey expanded the powers of the Financial Crimes Investigation Board (MASAK), positioning the financial intelligence unit as the principal authority responsible for monitoring suspicious transactions across high-risk sectors, including banking, financial services, insurance and gambling. The reforms strengthened MASAK’s supervision of payment flows while deepening cooperation between financial institutions, prosecutors and law enforcement agencies.
The prosecution of Papara has consequently become the defining test case for Turkey’s new enforcement agenda. Karslı is among 13 defendants charged with violating Law No. 7258 on illegal betting, establishing and participating in a criminal organisation, and laundering the proceeds of crime. Prosecutors are seeking prison sentences of up to 28 years for Karslı and four other senior executives.
Gürlek toughest stand
The investigation also carries significant political importance. The Istanbul Chief Public Prosecutor’s Office, led by Akın Gürlek, has repeatedly stated that illegal gambling offences will be prosecuted with the utmost severity. Gürlek, widely regarded as a close ally of President Erdoğan, has warned that there will be “no tolerance” for those who profit from illegal gambling at the expense of Turkish families, framing the campaign as both a criminal justice initiative and a broader social policy.
For Papara, the proceedings represent a remarkable reversal of fortune. Once regarded as the standard-bearer of Turkey’s fintech ecosystem, the company now operates under state-appointed trustees while prosecutors seek to establish whether one of the country’s most successful technology businesses became a central pillar of Turkey’s illegal gambling economy.
Whatever the eventual verdict, the case has already reshaped Turkey’s regulatory approach to financial crime. It signals a decisive shift in enforcement, with payment providers, fintech companies and digital financial infrastructure now occupying the front line of the country’s campaign against illegal gambling.
