The Central Bank of Turkey (TCMB) has confirmed that the licences held by Pay Fix and Aypara have been suspended amid investigations into illegal gambling.
Media reports have emerged over the past few days stating that Erkan Kork, the Chair of Pay Fix, had been arrested along with some other significant people involved with the firm.
The Financial Crimes Investigation Board (MASAK) states that the firms processed millions of transactions for illegal betting sites, with many payments processed via cryptocurrency.
Both land-based and online gambling are completely banned in Turkey except for the state-owned national lottery, Millî Piyango İdaresi, which also provides some online betting and gaming services.
Turkey’s Central Bank subsequently announced that the Electronic Money Institution (EMI) licences held by Pay Fix and Aypara had been revoked due to many arrests on illegal gambling charges.
EMI licences essentially mean that a payments firm sits in a tier below a retail bank in the wider financial services hierarchy. These firms can carry out the payments processing and transaction functions as a bank, but cannot issue loans or mortgages.
A statement issued by the Central Bank explained that it would continue its “surveillance and auditing activities with a proactive approach in order to ensure that payment and electronic money institutions operate securely, uninterruptedly, effectively and efficiently.”
“In this context, the prepared investigation reports are shared with the relevant public institutions and organisations to be evaluated within the scope of their duties,” the bank stated.
“A great battle”
The arrests at the two fintechs come amid a wider crackdown on illegal gambling in Turkey, something which is widespread in the country with football a particularly popular market.
For many gamblers, illegal firms may provide odds and offers that the state-run alternative lacks, though it should also be noted that many consumers may not even be aware that they are betting with an unlicensed site.
Back in January, the Turkish government issued a directive combatting illegal gaming sites, expanding the powers available to authorities. Speaking at the time, Finance Minister Mehmet Şimşek stated that the country ‘faces a great battle against illegal betting and gambling sites’.
The country’s National Lottery Authority (MPI) further states that it has banned over 233,000 illegal websites in 2023 and 2024 alone, with the majority of these originating from the US, followed by Armenia and the Netherlands.
In addition, the country is also one of the more notable for clamping down on the encrypted social media and messaging platform Telegram. This was done due to concerns around drug trafficking, pornography and extremism on the platform. The proliferation of illegal gambling, often in the form of crypto casinos, was another point of contention.
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