Kalshi Probes Trading Spike After Spotify Detects Song Chart Manipulation

Kalshi is looking into an incident in which streams of a song on Spotify may have been artificially boosted at the same time there was a jump in wagers on Kalshi’s prediction markets platform that the song would reach No. 1 on Spotify’s charts, the Financial Times reported Thursday (July 2).

The song, which was released in 2024, saw a nearly 70% leap in U.S. streams on Spotify between Sunday and Monday (June 28-29), according to the report.

During the preceding week, traders on Kalshi had priced only about a 2.5% probability that the song would reach No. 1 on the Spotify U.S. charts by the end of June.

Traders on Kalshi who placed wagers on the song during the week prior to Monday would have made about 20 times their initial outlay.

Spotify investigated the incident, determined that some of the streams were initiated by bots, and removed more than 500,000 streams of the song, which dropped the song to No. 4 in the charts.

There is no suggestion that the singer-songwriter of the song “Earrings,” Malcolm Todd, or his team were involved in any attempt to boost its ranking on Spotify, the report said.

Spotify said in the report that streaming services face all kinds of manipulation and that the company “has best-in-class detection and mitigation practices for manipulated streams, and we don’t pay out associated royalties.”

Kalshi told the FT, per the report: “We’re in touch with Spotify and are actively investigating this matter.”

Kalshi said in a June 9 blog post that it had implemented new market integrity updates that include risk scoring assigned to markets with heightened risk of insider trading or manipulation, employment verification to screen potential insiders, and enhanced whistleblower features that enable users to directly report abusive trading activity.

The company said that during the first quarter, it began more than 150 investigations, blocked more than 100 potential insider trades, made more than 20 referrals to law enforcement and implemented five disciplinary actions.

The Commodity Futures Trading Commission (CFTC) said in February that exchanges such as Kalshi are adhering to their oversight responsibilities and that they are the regulator’s first line of defense against insider trading in prediction markets.