KARACHI:
Papara — a Turkish financial technology company that acquired Pakistan’s leading fintech SadaPay in May 2024 — is currently under investigation by Turkish authorities for alleged involvement in money laundering, illegal betting, and other financial crimes.
The company’s founder and CEO, Ahmed Faruk Karsl?, has been detained along with 12 others as part of a sweeping law enforcement operation.
According to a report by Turkiyetoday.com, the Istanbul Chief Public Prosecutor’s Office confirmed that Karsl? was taken into custody during coordinated early morning raids across Istanbul. Authorities have seized a wide range of assets linked to the suspected criminal network, including eight businesses under PPR Holding Inc., multiple properties, luxury vehicles, yachts, and cryptocurrency wallets.
The investigation, supported by data from the Central Bank of the Republic of Turkey (CBRT), the Financial Crimes Investigation Board (MASAK), and other regulatory bodies, revealed that Papara’s platform was allegedly used to facilitate illegal financial transactions.
Investigators found that 102 of the 26,012 user accounts created through Papara’s technology were directly involved in high-volume illegal betting and fund transfers. These transactions were routed through 274 different bank accounts and eventually funneled into 16 cryptocurrency wallets as part of an elaborate money laundering scheme.
Turkish Interior Minister Ali Yerlikaya stated that 13 individuals have been detained and that assets of the companies and suspects involved have been frozen. The financial crimes unit estimates that the illicit transactions amounted to over 12.9 billion Turkish lira (approximately $330 million).
Papara, which reportedly has over 21 million users and a valuation exceeding $2 billion, acquired Pakistan-based SadaPaya licensed Electronic Money Institution (EMI) regulated by the State Bank of Pakistan — exactly one year ago. However, Pakistani authorities have not yet reported any links between the Turkish investigation and SadaPay’s operations in Pakistan.
Industry experts believe that the developments in Turkey necessitate a careful review by Pakistani regulators. A fintech analyst Muhammad Yasir urged the State Bank of Pakistan (SBP) to closely monitor local fintech operators associated with foreign sponsors.
“This case highlights the need for enhanced regulatory oversight and continuous due diligence,” noted Yasir, adding, “While the allegations pertain to activities in Turkey, the reputational impact on SadaPay is inevitable. SBP must re-evaluate its existing EMI regulations and adopt a proactive approach to managing cross-border financial risks.”
He added that as financial technologies evolved and cyber-financial crimes grew increasingly sophisticated, Pakistan’s regulatory framework must be regularly updated to safeguard consumer interests and the integrity of the national financial system.
