lessons from Malta’s Papaya case

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Standfirst: In August 2025, Malta became the unlikely stage for a clash between a fintech firm and one of the island’s most powerful newspapers. Papaya Ltd’s response – measured, legalistic, and paired with concrete operational moves, now stands as a case study in how financial institutions can build resilience under pressure. Drawing on the joint expertise of Lincoln’s Inn barrister (UK)  Hamna Zain and former Deutsche Bank professional Davor Zilic (croatian fintech specialist), this article examines what happened, and what it tells us about the uneasy balance between law, journalism and finance.

In early August 2025, Papaya Ltd – a licensed Maltese electronic money institution (EMI), found itself in the eye of a media storm. The Times of Malta, the country’s largest daily, sent the company a list of probing questions which, Papaya argued, would have forced it to reveal confidential information from a 2021 compliance audit. The firm turned to the courts, asking for a temporary injunction to prevent publication. A judge granted a temporary protective measure pending a full hearing on its request for an injunction, that blocked the newspaper from publishing an as-yet-unwritten article about the company. The request for a substantive injunction was ultimately refused on 12 August. This legal action, triggered after one of the newspaper’s journalists sent questions to Papaya, prompted heated debate about press freedom, censorship, and the responsibilities of both media and financial firms.

The headlines were immediate and emotive. “Times of Malta hit by court ‘gagging order’ from e-money firm”. “We’ve been gagged. This is why it matters.” For days, the injunction was portrayed as an assault on press freedom. The newspaper itself argued that “preventing a journalist from publishing a story is recognised in all democratic countries as illegal and a violation of the journalist’s fundamental right to freedom of expression – a main pillar of democracy.” In its editorial, it warned: “This is not how press freedom works in a democratic society… If such orders become common practice – if journalists can be silenced based on hypotheticals – then meaningful investigative journalism in Malta will become nearly impossible.”

That sentiment was echoed at the European level. Maltese MEP David Casa described the injunction as “an unprecedented and chilling attack on press freedom. Such censorship undermines democracy, the public’s right to know, and journalism in the public interest.”

Yet the facts point to something narrower: a short-lived, lawful mechanism designed to give the courts time to weigh whether disclosure would breach confidentiality rules.

For investors – particularly in Italy, where Maltese fintechs are intertwined with banking and capital flows – the episode is more than a media spat. It raises a systemic question: how should regulated institutions respond when compliance obligations collide with journalistic imperatives?

Expert voices

Hamna Zain: “Not censorship, but the law in action”
For British lawyer Hamna Zain, portraying Papaya’s injunction as a “ban on press freedom” is misleading. “Every democracy recognises that freedoms come with limits,” she explains. “Injunctions are not blunt gags – they are tightly defined legal remedies, designed to prevent irreparable harm while the courts deliberate.”

She points to precedents across Europe. In Cream Holdings v Banerjee (UK, 2004), the House of Lords upheld the principle that injunctions can be lawful tools when confidentiality and reputational harm are at stake, provided the claimant meets a high evidential threshold. In Barclays Bank v Guardian (UK, 2009), judges ordered the removal of leaked internal memos on tax strategies, ruling they were confidential and unlawfully obtained. And in Luxembourg’s LuxLeaks case, PwC secured convictions against whistleblowers who leaked confidential tax rulings – a stark reminder that even in transparency-minded EU states, financial secrecy carries legal force.

“In light of these cases, using the courts to defend confidentiality is not an attack on democracy,” Zain argues. “It is democracy in action: rights clashing, being tested, and resolved under judicial scrutiny.”

Davor Zilic: “A false and dangerous dichotomy”
Croatian fintech expert Davor Zilic is blunter still: “The injunction applied to one document, not an entire newspaper. To pretend society must choose between the rule of law and freedom of expression is a false and dangerous dichotomy.” What worries him is not the court’s actions, but the selective framing by the Times of Malta. “Old compliance findings were recycled as if they were breaking news,” he says. “Meanwhile Papaya’s remedial work and partnerships went largely unreported.”

In Papaya’s case, the Times of Malta has repeatedly highlighted the fine and the company’s historical ties to a sanctioned director, Frederic Villa, who resigned in February 2023. Yet, the same outlet has given minimal coverage to Papaya’s proactive steps, such as its recent partnership with SME Bank to enhance the safeguarding of customer funds, that not only aligns with existing regulatory standards but also anticipates future regulatory developments and is already in line with the forthcoming PSD3 requirements on the diversification of safeguarding methods. This kind of selective reporting doesn’t serve the public interest; it serves an agenda. Who stands to benefit?

Zain: “Recycling old controversies”
Zain shares that concern. She points out that the fine at the heart of the story – €279,000 issued in 2023 and still under appeal – stemmed from a 2021 audit. By mid-2025, the company had already spent years under regulatory supervision. “Genuine public-interest journalism uncovers fresh wrongdoing or imminent risks. Here, the narrative was constructed from stale material,” she says.

Zilic: “The presumption of innocence is at risk”
Zilic warns that treating allegations under appeal as settled facts undermines a cornerstone of European law. “We’re normalising trial by media,” he argues. “The presumption of innocence is being eroded. Regulated firms cannot pick and choose which rules to follow – but nor should journalists play judge and jury before the courts themselves have spoken.

Zain: “Confidentiality still matters”
For Zain, the journalist’s questions crossed a line. “Press freedom is not an absolutist licence,” she says. “Client data and compliance reports are protected under MFSA rules and the EU’s General Data Protection Regulation (GDPR).

Demanding their disclosure is not legitimate reporting – it risks incitement to unlawful disclosure.”

Zilic: “What message does this send to fintech?”
Zilic connects the dots back to Malta’s role as a fintech hub. “If a journalist can demand client data and brand legal remedies as censorship, the message is clear: if you’re in fintech, you’re a target. That’s not the environment that fosters growth or innovation.”

In conclusion on this point, the Papaya case underscores that responsible journalism must recognize legal boundaries. A free press is not an absolutist license to obtain and print anything and everything. Especially in the financial sector, some information is protected for valid reasons. Journalists should be careful not to demand that sources or companies violate the law. There are ways to report on financial misconduct, if it exists, without compromising client confidentiality – for example, by focusing on systemic issues or anonymizing details. In this instance, had Times of Malta limited itself to the fact of the FIAU fine and general criticisms (which were public) rather than seeking the underlying client data, the conflict might have been avoided. By venturing into protected territory, the journalism crossed a line that triggered the company’s legal defensive response. This serves as a cautionary tale: the press, too, has a duty of care when handling confidential information, and should not be seen to encourage illegality in the name of a story. As seen in the LuxLeaks case, even when media reporting is framed as whistleblowing, courts may still hold those who leak or unlawfully obtain protected information accountable under secrecy laws, especially in the financial sector.

A bigger lesson

Neither Zain nor Zilic dispute the importance of a free press. But both argue that conflating judicial safeguards with censorship sets a troubling precedent. Papaya’s clash with the Times of Malta is less about silencing journalists than about the limits of lawful disclosure. In their combined view, democracy depends on both pillars – a press free to probe, and a legal system empowered to protect confidentiality until facts are settled.

And that is why the Papaya case matters beyond Malta. In a small EU state, a single court order and a handful of headlines became a proxy war over freedom, law and financial credibility. The test is not just for Papaya or for one newspaper, but for Europe itself: can its democracies protect both transparency and due process at the same time? If they cannot, the losers will not only be companies or journalists, but the very trust on which Europe’s legal and financial systems are built.

 *This article was paid for. Cryptonomist did not write the article or test the platform.