Swedish Investigatory Report Reveals Spotify as Money-Laundering ‘ATM for Criminal Gangs’

Spotify money laundering report Sweden
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Spotify money laundering report Sweden
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Photo Credit: Joshua Schardt / CC by 2.0

A new investigatory report reveals that multiple Swedish gangs have used the Spotify platform as a “money-laundering ATM.”

Criminal gangs in Sweden linked to bombings and shootings in recent years are using fake Spotify streams to launder money, a Swedish investigatory report revealed on Tuesday.

According to Swedish newspaper Svenska Dagbladet, crime networks linked to drugs, fraud, and contract killings have for years used Stockholm-based music streaming platform Spotify to pay for false streams of songs published by artists with ties to the gangs. The platform then pays them for the inflated number of streams, effectively laundering the money.

Svenska Dagbladet said its information was confirmed by four gang members from three separate criminal networks based in Stockholm and an anonymous police investigator.

“I can say with 100% certainty that this goes on. I have been involved in it myself,” the newspaper quoted one anonymous gang member, who said his gang began using Spotify for money laundering in 2019. “We have paid people who have done this for us systematically.”

He explained that gangs would convert their dirty money into Bitcoin and then use the cryptocurrency to pay people who sold fake streams on Spotify — many of whom they meet on Facebook. Those people “made sure we ended up at the top of the charts,” he said, noting that the fake streams would lead to a noticeable uptick in legitimate streams. Higher streams then lead to higher payouts from Spotify.

“Spotify has become a bank machine for the gangs. There’s a direct link to the gangs and the deadly violence,” an investigative police officer who wished to remain anonymous told Svenska Dagbladet. Police data reveals that in 2022, Sweden registered 90 blasts, another 101 cases of attempted bombings or preparations for bombings, and 91 shootings, 62 of which were fatal.

The anonymous police investigator says he contacted Spotify in 2021 to discuss his findings but that the company never returned his call. Spotify declined an interview with Svenska Dagbladet but said, “We have no evidence that money laundering occurred via Spotify.”

“Less than one percent of all streams on Spotify have been determined to be artificial, and those are promptly mitigated prior to any payouts,” the company said in a statement to the international French outlet AFP, claiming that its “automated processes and manual monitoring are market leading” but admitting “there is more work to do.”

“Manipulated streams are a challenge for the entire industry and a problem that Spotify is working hard to combat. It is important to know that Spotify does not make any payments directly to artists, but to rights holders and distributors,” the company explains.

“It is equally important not to misunderstand the extent of the problem with manipulated streams. Thanks in part to the fact that our payouts are not real-time, our systems detect and address anomalies before they reach material levels.”

Spotify also said it was unaware of any contact made by law enforcement, nor had the company found “any data or hard evidence that indicates that the platform is being used at scale in the fashion described.”

As identifying and combatting streaming fraud become increasingly essential priorities for the music industry, Spotify notes that it is “one of the few streaming services that publish information about our measures to combat manipulation of streams in industry studies.”

Spotify is a member of the Music Fights Fraud Alliance, where several players in the industry, including Amazon Music and Distrokid, work together to combat fraud and provide artists with educational materials that show the damage caused by stream manipulation.

But not everyone thinks Spotify and other DSPs are doing enough to combat fraud. Universal Music Group’s Sir Lucian Grainge called out “bad actors” in January for using illegitimate means to acquire royalty revenue from music streaming services and argued that these platforms’ dominant “pro rata” payout model was outdated. In May, Sony Music Group chairman Rob Stringer also voiced concerns over the increasing prevalence of streaming fraud.

“Fraud on key DSPs is a problem that must be eliminated through aggressive enforcement by these DSPs and distributors or by changing payment methods to better reduce the incentive for fraud,” said Stringer.

“Reports that suggest streaming fraud is funneling significant revenue towards the activities of organized crime are incredibly disturbing and increase pressure on streaming platforms to stamp out the practice as a matter of urgency,” reads a statement from IMPF (Independent Music Publishers International Forum), whose membership comprises more than 200 independent music companies worldwide.

“Fraudulent streams have been a growing problem for some time now, with the recent French Study (Centre National de Musique) estimating they could make up 3% of all streams — a figure that represents only those streams which the services can actually detect.”

“Not only are independent publishers and legitimate music companies suffering financial damage as a result, but the suggestion that this issue is aiding and abetting violent criminals means it must become a critical priority for streaming services.”