Through a well-organized construct of artists, cybercriminals and a number of helpers, several people from the Swedish underworld are said to have managed to launder large sums of money via the music streaming service Spotify.
According to a report in the magazine “Svenska Dagbladet”, organized gangs have been able to launder money on a large scale for several years with the help of the music streaming service Spotify.
Money laundering is generally understood as the act of smuggling criminally acquired money unnoticed into the normal, legal economic cycle. This can be done through cash deposits, purchases of high value consumer goods and real estate, as well as bogus transactions and complex wire transfers around the world, among others. Money laundering is immensely important for terrorists and mafia gangs in order to reinvest illegal profits or to be able to prepare for future actions.
Spotify distributes money using the “streamshare method”
A very sophisticated version of money laundering is currently being discussed in Sweden, which is said to have something to do with the number of shootings, bombings and gang crimes in the country, which has been increasing in recent years.
With the increase in crimes, especially in the form of robbery, fraud and theft, the need for Swedish criminals to launder the money gained from them also increases. Since at least 2019, it should be a way – in the truest sense of the word – to use the world market leader for music streaming, which was created in Sweden, for this purpose.
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First, a quick look at how Spotify works. Users either have free accounts with the service, in which the music played alternates with advertising, or they have paid accounts that are then ad-free. Around 70 percent of all Spotify earnings are then paid out to those who own the music rights. This pool of money is called the “License Pool”. There is no fixed amount per stream. Instead, the distribution is calculated using the so-called “Streamshare” method.
Preferred Currency: Bitcoin
Put simply, this means that a rights holder who is responsible for, for example, one percent of all streams in a market is entitled to one percent of Spotify’s license pool from the same market, as “Svenska Dagbladet” summarizes. To get a feeling for the volume: In 2021, Spotify paid out around seven billion dollars (about 6.5 billion euros) in this way.
The money laundering model now works like this, according to several anonymous insiders interviewed by “Svenska Dagbladet”: The first step was to convert the proceeds of crime into the cryptocurrency Bitcoin. Crypto traders were contacted via Facebook groups and received cash for their services. In the next step, the cryptocurrency was used to pay people who sell Spotify fake lists – specially programmed bots that simulate being a real customer.
The bots ensured that certain artists ended up in the upper regions of the charts by calling up one of their songs particularly often. As soon as the artist actually appeared in the charts, the “real” number of hits by real users, who only became aware of the artist through the chart success, also increased.
New companies with clean money
Logically, as listenership grew, so did Spotify’s payouts. Rappers who were successful in this way – with connections to organized crime – also started to found their own record companies during this time, into which the proceeds then flowed.
Spotify did not respond to specific inquiries from the AFP news agency about money laundering opportunities, but the company was quoted as saying that only a very small proportion of all streams had been classified as fake, namely less than one percent.
So far, no concrete police measures have been reported by the Swedish police in this context. However, speculation about prominent artists involved and the extent of the money laundering that has already taken place are already in full swing – not only in Sweden itself.
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Source: Stern
