Spotify’s streaming fraud issue runs so deep that Kalshi traders are profiting from rigged charts

News Room

Spotify has removed more than half a million streams from Malcolm Todd’s song “Earrings” after finding suspected bot activity, according to a report by Financial Times.

The track, first released in 2024, suddenly rose to No. 1 on Spotify’s daily U.S. chart after a sharp jump in streams. At the same time, traders on prediction market Kalshi had been betting on whether Todd would land a No. 1 song on Spotify USA before the end of June. There is no suggestion Todd or his team were involved in any attempt to boost the song’s numbers. Kalshi has said it is investigating the matter.

A chart move became a payout

According to the report, U.S. streams of “Earrings” jumped almost 70% between Sunday and Monday. Spotify later removed streams it believed were initiated by bots, which are designed to play tracks repeatedly and make them appear more popular than they are.

After the correction, “Earrings” fell to fourth place on Spotify’s U.S. chart for Monday. Kalshi, however, had already paid out traders who bet on Todd reaching No. 1 before the end of June. According to the Financial Times, traders who backed the long-shot outcome could have made roughly 20 times their initial wager.

Can Spotify keep its charts clean enough?

Spotify has dealt with fake streams for years, usually as a royalties and chart integrity issue. Now, it has another problem to worry about, since those same charts can be used to settle prediction-market bets.

Spotify’s spam problem also goes beyond music streams. Earlier this year, the company removed tens of thousands of fake podcast episodes tied to illegal online pharmacies and scam websites. Music streaming fraud has become more sophisticated too. Prosecutors previously charged Michael Smith in an AI-assisted streaming fraud case involving bots and billions of artificial plays. He later pleaded guilty.

Spotify says it has “best-in-class” systems to detect and reduce fake streams, and does not pay royalties on manipulated plays. Kalshi says it is in touch with Spotify and is investigating, but the companies are not exactly aligned. Spotify’s legal team reportedly asked Kalshi to remove its logo from the app and website, and Kalshi has added a disclaimer saying its products are not endorsed by Spotify.

Read the full article here

Share This Article
Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *