According to a report in the magazine “Svenska Dagbladet”, organized gangs have been able to launder money on a large scale using the music streaming service Spotify for several years.

Money laundering is generally understood to mean the act of funneling criminally acquired money unnoticed into the normal, legal economic cycle. This can happen, among other things, through cash deposits, the purchase of high-quality consumer goods and real estate, as well as through fictitious transactions and complex transfer chains around the world. For terrorists and mafia gangs, money laundering is extremely important in order to reinvest illegal profits or to prepare for future actions.

A very sophisticated version of money laundering is currently being discussed in Sweden, which is said to have something to do with the increasing number of shootings, bombings and gang crime in the country 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 funds obtained from them is also increasing. One option – in the truest sense of the word – has been to use the world market leader for music streaming, which emerged in Sweden, for this purpose since at least 2019.

First, a quick look at how Spotify works. Users either have free accounts on the service, in which the music played alternates with advertising, or they have paid accounts, which are then ad-free. Approximately 70 percent of all Spotify revenue is then paid out to those who own the music rights. This pool of money is called the “royalty pool.” There is no fixed amount per stream. Instead, the distribution is calculated using the so-called “streamshare” method.

Put simply, this means that a rights holder who, for example, is responsible for 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 feel for the volume: In 2021, Spotify paid out around seven billion dollars (around 6.5 billion euros) this way.

The money laundering model now works like this, according to several anonymous insiders interviewed by the “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. The next step was to use the cryptocurrency to pay people who sell fake Spotify 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 polling one of their songs particularly frequently. As soon as the artists actually appeared in the charts, the “real” number of hits also increased due to real users who only became aware of the artist through the chart success.

As listener numbers increased, logically, Spotify’s payouts also increased. Rappers who were successful in this way – with connections to organized crime – also began to set up 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 the money laundering possibilities, but the company was quoted as saying that only a very small proportion of all streams were classified as fake, namely less than one percent.

There have not yet been any reports of any specific police measures taken 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 is already in full swing – and not just in Sweden itself.

Source: “Guardian”, “Svenska Dagbladet”