People have been trying to game Spotify for probably as long as the platform has been online. From claiming another artist’s song as your own to click farms pushing up streaming numbers to playlist highjacking, crooks always seem to find a way take money from deserving artists and songwriters. The latest scam has more to do with money laundering than directly stealing royalties, and because organized crime is involved it might bring some serious streaming enforcement to the platform.
A recent report from the the Swedish paper Svenska Dagbladet alleged that four Swedish gangs take their profits derived from various crimes, convert them into cryptocurrency, then use that to buy fake streams for artists they’re connected to. They then collect the royalties from the fake streams. The gangs actually lose money by paying for the fake streams, but write it off as a normal cost of money laundering. At this point, their funds are clean and can’t be traced back to the gangs.
As you could imagine, this has peaked the interest of various law enforcement agency cybercrime units around the globe, who are now attempting to look closely at anything that appears to be unusual activity in the Spotify universe. Spotify, of course, would rather get ahead of this and so are internally ramping up measures to detect fake streams and artists, although it won’t comment other than to say that it hasn’t detected any gang activities on the platform.
The nature of any scam is that the bad guys figure out something new and it takes the police some time to catch up. Eventually that happens, and then a new set of bad guys are off to something new again. The big question here is if this will be enough to force new regulations on the streaming industry.