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How are Swedish gangs using music platform Spotify to launder money?

Spotify app
Spotify app Copyright Patrick Semansky/AP.
Copyright Patrick Semansky/AP.
By Eleanor Butler with AFP
Published on Updated
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Criminals in Sweden are using cryptocurrency to pay for Spotify streams and clean their dirty money.

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Four gang members in Stockholm, as well as an anonymous police investigator, spoke to Swedish paper Svenska Dagbladet about hiding money trails linked to violent crime.

Income earned through drug deals, contract killings, and robbery is being concealed through artificial streaming agreements.

Criminals first pay musicians through a cryptocurrency transaction, which is more difficult to trace than a traditional payment. The artists will then be paid for streaming their songs, and the criminal can collect the cleaned money.

"Spotify has become a bank machine for the gangs", the investigator quoted in SvD’s report told the paper.

The music platform nonetheless assured AFP that “less than 1% of all streams on Spotify have been determined to be artificial”, adding that any manipulated figures are “promptly mitigated prior to any payouts”.

According to SvD, a million streams generates about 40,000 to 60,000 krona in Sweden, which is approximately €3,450 to €5,180.

Spotify’s royalty system has recently been criticised for allowing users to cheat the system, rather than channelling revenue towards real artists.

JPMorgan executives estimated that ten percent of all streams on the platform are generated by automated listeners, and that Spotify subscribers could make $1,200 (€1140) a month by listening to their own song on repeat.

The theory was first reported in the Financial Times last month, but Spotify’s CEO Daniel Ek has since rejected these claims.

Spotify CEO Daniel Ek defends royalty system

Spotify’s website says: “Contrary to what you might have heard, Spotify does not pay artist royalties according to a per-play or per-stream rate. The royalty payments that artists receive might vary according to differences in how their music is streamed or the agreements they have with labels or distributors.”

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