Swedish Gangs Are Reportedly Using Spotify To Launder Money
As the Swedish streaming giant Spotify has risen to become the most important company on the entire music-industry landscape, it’s been beset with charges of fraud — allegations that the company has paid producers to create tracks under fake names and then given prominent playlist placement to those tracks. (Spotify has denied those charges.) It also seems fairly easy for outside parties to use bots to generate fake streaming numbers. Now, a report from the Swedish newspaper Svenska Dagbladet claims that criminal gangs in Sweden are using Spotify streaming fraud as a money-laundering tool.
As Music Business Worldwide points out, the Svenska Dagbladet report has anonymous quotes from Swedish gang members and police officers, who say that the streaming service “has become a criminal tool.” The anonymous cop says that “gangs launder money from drug dealing, robberies, fraud, and assassination missions via the platform” and that the money can add up to millions.
The alleged scheme goes like this: The gangs finds crypto traders on Facebook, and they convert their street money into Bitcoin. Then, they use that Bitcoin money to buy fake streams for artists — typically Swedish “gangster rappers” — who have connections to those gangs. One of the report’s sources says, “It’s about more than buying streams. If you’re a network and you want to attract kids and you have a rapper who’s going big, that’s half the job for you. It is very good for recruiting purposes.”
In response to the Svenska Dagbladet report, a Spotify representative says that the company has “no evidence that money laundering occurred via Spotify” and that “less than one percent of all streams on Spotify have been determined to be tampered with.” Major record-label heads, who have their own reasons to rattle sabers against Spotify and other streaming services, have been pressuring Spotify to crack down on fake streams, as well as changes to the royalty-payment structure. One has to imagine that reports like this will only increase those demands.