Turkey’s central bank revokes Papel’s license amid money laundering and illegal betting probe

Turkey’s central bank has revoked the operating license of Papel, an electronic money and payment services company that has been under investigation over allegations that its payment infrastructure was used to launder proceeds from illegal betting, fraud and unauthorized forex trading. For PSPs serving high-risk verticals, the case is a reminder that payment rails can become the first thing regulators shut down once suspicious flows turn into a criminal file.

1. The central bank took the decision on September 18 and published it in the Official Gazette on Wednesday. Papel had held an electronic money institution license since October 2022, but the central bank only cited provisions of Turkey’s law governing payment systems, payment services and electronic money institutions, without giving further detail on the grounds for revocation.
2. The license action follows an İstanbul court order from eight months earlier that seized Papel’s assets and appointed the state-run Savings Deposit Insurance Fund (TMSF) as trustee. That happened in the context of a wider investigation led by the İstanbul Chief Public Prosecutor’s Office, launched in January after central bank inspections and analyses by the Financial Crimes Investigation Board (MASAK).
3. Prosecutors said proceeds from illegal betting, unauthorized forex trading and fraud were routed into the financial system through electronic money and payment companies, then moved through numerous companies in Turkey and abroad in an attempt to launder the funds. Police raids in İstanbul and seven other provinces led to 38 detentions; 15 suspects were later jailed pending trial, while 23 were placed under judicial supervision.
4. The investigation later produced an indictment against 44 suspects. In June, prosecutors sought prison sentences ranging from nine to 27 years over allegations that illegal betting proceeds were laundered through Papel. Founder Seyhan İbrahim Yıldırım and four others were accused of managing a criminal organization, while 39 other suspects were charged with membership in the organization.
5. Turkish media citing the case file said a MASAK analysis identified TL 1.5 billion ($35 million) in transactions linked to Papel and reviewed connections involving Dubai, Georgia, Cyprus and Europe. Investigators also reportedly described Papel as a “backup” mechanism used to launder funds after other illicit payment channels were disrupted.

The same case file reportedly pointed to Papel’s rapid capital increase from TL 7 million to TL 300 million despite losses, as well as an alleged TL 827 million in cash inflows by Yıldırım whose source investigators said could not be established. Papel was founded by Yıldırım in 2020.