Spotify Confirms Streaming Fraud After Kalshi Trader Flags Suspicious Activity

Caleb Davies, a top trader on Kalshi known for his earnings of over $1.2 million from prediction markets, became suspicious this summer of manipulation in Spotify-related markets. Davies, who meticulously analyzes Spotify data daily, noticed an anomaly when Malcolm Todd's song "Earrings" surged to number one on a Spotify chart. He calculated the probability of such a jump as 1 in 77 octillion, concluding it was likely bot-driven.

Davies compiled evidence and contacted Spotify, Kalshi, and Polymarket. Spotify confirmed to WIRED that it investigated the incidents and found signs of artificial streaming. “All streaming services face ever-changing stream manipulation. Spotify has best in class detection and mitigation practices for manipulated streams, and we don’t pay out associated royalties,” said spokesperson Laura Batey. The company adjusted its charts, removing over 500,000 artificial streams, which dropped Todd's song from first to fourth place.

By the time Spotify acted, Kalshi had already settled the market, paying out traders who had selected Todd's song. At Spotify's request, Kalshi removed the company's logo from its markets and revised language that implied Spotify had verified the chart results. Kalshi's head of enforcement, Robert DeNault, had earlier suggested that the uptick could have innocent explanations or that traders might be copying Polymarket activity.

Polymarket, however, stated that Todd's song was not an option in their market, so no one profited from the fraud there. The company is reviewing the situation but has not found immediate manipulation.

Amanda Fischer of Better Markets criticized prediction platforms for failing to ensure contracts are resistant to manipulation. “They’re obviously readily susceptible to manipulation,” she said.

Davies, meanwhile, has sworn off chart-based markets, despite their historical profitability for him.