Papel Loses Its Operating Licence as Illegal Betting Investigation Deepens

The Central Bank of the Republic of Turkey has revoked the operating licence of Papel Elektronik Para ve Ödeme Hizmetleri A.Ş., bringing an end to the company’s authorization to operate as an electronic money institution. The decision, dated September 18, 2026, was published in the Official Gazette on September 23.

The move marks a major escalation in a regulatory process that began in January, when some of Papel’s activities were temporarily suspended. The company is also at the center of a criminal investigation in Istanbul involving allegations that proceeds linked to illegal betting, fraud and unlicensed forex activity were moved through electronic money and payment systems.

Why Did the Central Bank Revoke Papel’s Licence?

The Central Bank based its decision on provisions of Turkey’s Law No. 6493, which regulates payment services and electronic money institutions. Under the law, an operating licence can be revoked if a company no longer meets the conditions required to hold that licence or if the regulator concludes that continued activity could threaten the security of payments.

The short decision published in the Official Gazette does not provide a detailed account of the specific failures or transactions that led to the revocation. However, the decision follows months of regulatory action, a criminal investigation based on Central Bank and Financial Crimes Investigation Board, or MASAK, findings, and the preparation of an indictment against dozens of suspects.

Papel had already faced a partial and temporary suspension on January 22, 2026, under a separate Central Bank decision. That measure covered certain payment services as well as the issuance of electronic money. The September decision goes much further by removing Papel’s underlying authorization to operate as an electronic money institution altogether.

Prosecutors Filed an Indictment Against 44 Suspects

The criminal side of the Papel case accelerated almost immediately after the January suspension. On January 23, 2026, authorities carried out an operation across eight provinces, led from Istanbul, while Turkey’s Savings Deposit Insurance Fund, known as the TMSF, was appointed as trustee to the company.

The investigation was built partly on financial analyses prepared by MASAK and the Central Bank. Prosecutors later completed the investigation and prepared an indictment against 44 suspects in June.

According to the case file, prosecutors allege that proceeds generated through illegal betting, unlicensed forex schemes and fraud were introduced into the financial system through Papel before being moved through different companies and accounts. Five suspects were accused of managing a criminal organization, while 39 others were accused of membership. The prison terms sought range from nine to 27 years, depending on the charges.

A major part of the indictment focuses on transaction patterns identified in Papel’s payment infrastructure. Investigators examined money movements totaling around TRY 1.5 billion, with particular attention paid to users who received large volumes of wallet-to-wallet transfers despite relatively low levels of funding from bank accounts.

The reports cited in the indictment referred to 31,115 users who received high levels of wallet transfers despite limited bank funding, 43,488 customers linked to accounts previously associated with illegal betting, and 1,777 active high-risk customers identified through network analysis.

Prosecutors also alleged that some of Papel’s own fraud-prevention systems had detected suspicious activity without sufficient follow-up action being taken. The case file further referred to multiple customers using the same IP addresses or IP ranges, as well as virtual POS merchants whose transaction volumes were considered inconsistent with their apparent commercial activity.

These findings form part of the allegations and regulatory assessments contained in the prosecution file. They are not final court judgments.

How Did the Papel Case Develop?

Papel’s path from a licensed fintech business to an electronic money institution with its licence fully revoked unfolded over several years, with the most significant developments concentrated in 2026.

• October 27, 2022: Papel received authorization to operate as an electronic money institution.
• June 8, 2023: The scope of its licence was expanded to include additional payment services.
• January 22, 2026: The Central Bank temporarily suspended certain payment services and Papel’s electronic money issuance activities.
• January 23, 2026: Authorities launched an investigation into alleged illegal betting and money laundering activity, while the TMSF was appointed as trustee.
• June 22, 2026: Prosecutors completed the investigation and prepared an indictment against 44 suspects.
• September 18, 2026: The Central Bank decided to revoke Papel’s operating licence.
• September 23, 2026: The revocation was published in the Official Gazette.

The period between the initial suspension and the final revocation lasted roughly eight months. The September decision therefore represents more than the suspension of individual products or services; it ends Papel’s authorization to operate as an electronic money institution in Turkey.

What Happens to Customer Funds?

The loss of an operating licence does not mean that customer balances simply disappear. Under Turkey’s payment services legislation, electronic money and payment institutions are required to keep customer funds in protected accounts held with banks.

Papel had previously told customers that their funds were protected under applicable regulations and that repayments to customers and merchants would begin after the necessary checks were completed.

The September 23 licence decision, however, does not contain a general repayment schedule or a specific date for when all users will regain access to their balances. Public complaints have also shown that some customers have reported being unable to access funds for extended periods.

Customer balances held with electronic money companies are legally different from ordinary bank deposits. As a result, repayments are handled under the protection-account and customer-claim provisions of Law No. 6493 rather than through the standard bank deposit insurance framework.

Turkey’s Fintech Sector Is Increasingly Intersecting With Illegal Betting Investigations

Papel is not the first Turkish payment company to become involved in a major investigation linked to illegal betting. Over the past two years, PayFix, İninal, Aypara and Papara have also faced regulatory action, criminal investigations or both.

Although the legal status of each case is different, several developments have followed similar patterns:

• PayFix, İninal and Aypara: The Central Bank began taking significant regulatory measures involving PayFix in September 2024. The activities of the three companies were temporarily suspended in March 2025, and their operating licences were later revoked in November 2025. In the PayFix investigation, prosecutors alleged that payment infrastructure had been used for illegal betting transactions and the laundering of criminal proceeds.
• Papara: A major investigation became public in May 2025, when the TMSF was appointed as trustee. An indictment later alleged that accounts with approximately TRY 12 billion in transaction volume had been used across 102 illegal betting websites. The Central Bank revoked Papara’s licence in October 2025, but an administrative court suspended the enforcement of that decision. The regulator subsequently withdrew the licence revocation in January 2026.
• Papel: The company received its licence in 2022 and expanded its authorization in 2023. Its activities were partially suspended in January 2026, followed by a criminal investigation, the appointment of a trustee and, eight months later, the complete revocation of its electronic money licence.
• Other payment institutions: Central Bank records show numerous suspensions, administrative fines and licence revocations across Turkey’s payment sector during 2025 and 2026. Not all of these cases involve illegal betting, and the legal grounds differ from one company to another.

The scale of regulatory enforcement has also increased significantly. According to Central Bank figures, seven institutions lost their licences in 2025, 14 had their operations temporarily suspended, and 72 institutions received administrative fines totaling TRY 373.2 million. Hundreds of cases involving suspected unauthorized payment activities were also referred to prosecutors or courts.

The PayFix, Papara and Papel cases nevertheless share a significant feature: each company was able to build a large customer base and substantial transaction volume before illegal betting-related money flows became the subject of major regulatory or criminal investigations.

The reports in these cases have examined tens of thousands of accounts, high-risk customer clusters, virtual POS transactions and transaction volumes reaching into the billions of lira. This has placed greater attention on how quickly payment institutions identify suspicious users, how they respond to alerts generated by their own monitoring systems, and how closely high-risk merchants are supervised.

Papel’s licence revocation is the latest development in that broader trend. The next stages will focus on the repayment of customer funds, the court proceedings involving the 44 suspects and whether Papel challenges the Central Bank’s decision through administrative litigation.