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People have been noticing this a lot recently but what nobody seems to know is that this is a form of money laundering/“scamming.” I know because I used to be a
by usednet 4y ago
People have been noticing this a lot recently but what nobody seems to know is that this is a form of money laundering/“scamming.” I know because I used to be active on crime forums and talked to some of the people who engineered this scheme.
People will set up fake Spotify artist accounts with stolen identities and bank accounts, pay a musician for songs that pass as music, and then bot millions of streams on them. At this point there are so many of these fake profiles and songs that the music, which is simple “mood music” normally (which happens to be easy to make), is appearing on real playlists and being recommended to real listeners.
- vosper 4y agoIs it money laundering in that "dirty" money pays for the bots that rack up the streams, which generates "clean" money paid from Spotify to the fake artist?
- williamscales 4y agoYep, exactly
- bryanrasmussen 4y agook so the problem for the money launderer is that as spotify gets better at detecting bots and spam accounts they will have to pay increasing amounts of dirty money to get out clean money, at what point does it become a losing proposition to them, that is to say when this form of money laundering is less efficient than older forms?
- coldtea 4y agoA bigger problem would be that Spotify pays very little. And to have the bot "listen" to a song (to be eligible for payment) takes minutes of streaming, which turns to tons of time and a big bandwidth bill, since they'll need to do thousands of them in parallel...
- bryanrasmussen 4y agoit's obviously worthwhile for them now to do this, but sure it is an additional cost that at some point will make it not worth doing.
- webmobdev 4y agoThis is where malware run bots come into picture ... it solves a lot of problem like not having to pay for bandwidth, evading detection by distributing access to the songs among varied IP and geography, etc.
- dropofwill 4y agoThey wouldn't have to actually play the songs, could just use the offline listening reporting endpoints.
- IAmNotAFix 4y agoWhat is the money efficiency of that?
- rexreed 4y agoIt's not about efficiency, it's about avoiding getting caught for criminal acts. Since criminals don't pay taxes on their earnings and don't have to pay for all sorts of things others do, they're already more "efficient"
- nightpool 4y agoSure, but if you're going through a distribution service that has a 60/40 split with Spotify, are you going to be okay with 40% of your laundered proceeds getting eaten by Spotify? How does that compare to other laundering opportunities? And that's not even counting the costs imposed by your distributer. For example, if you have 1,000 tracks, on TuneCore that's $10,000 dollars just for track distribution, as well as a $50 per-album yearly fee. It does seem somewhat inefficient, and very easy for Spotify to notice and crack down on. (But they don't have a lot of incentive to look too closely, since they're getting paid handsomely for it...)
- folkrav 4y agoDiversification, I guess? Having multiple concurrent laundering streams, so if one dies, the rest can keep going?
- cuteboy19 4y agoLike an airgap for money
- thehappypm 4y agoI don’t doubt that people are using Spotify to launder money, but I really don’t think this is particular method is a viable approach. It would be a much better business model if you could buy off iTunes or something, where are you know that most of the money is actually going to the recipient.
- CincinnatiMan 4y agoIs the idea that you spend dirty money on the bots in order to earn clean money on the fake artist accounts?
- mathattack 4y agoAnd it’s cheaper.
- nso 4y agoFascinating. It's so simple and makes so much sense, and replicable on any service that trades eyeballs (or ears in this case) for cash.
- nerdponx 4y agoAnd now as far as we can tell there's a cottage industry built around algorithmically-appealing (and probably algorithmically-generated) mood music. What a weird outcome.
- thematrixturtle 4y agoThat almost makes sense, except that the money is paid out to the artist, so if you're using a stolen bank account, it remains 'dirty' after the round-trip. What you'd want to do is use the dirty money for the bots that drive up the revenue, and the clean account for the artist to collect the royalties. This way the artist has plausible deniability, and if the bank account paying for the bots gets busted, it doesn't matter, you can get a new one.
- thayne 4y agoIsn't that what the parent described?
- thematrixturtle 4y agoNo, they suggested using stolen bank accounts to receive the artist royalties.
- afiori 4y agoI think they meant "stolen identities and legitimate bank account opened by the stolen identity"
- caf 4y agoThis is right - the whole point with money laundering is to have a legitimate business where extra money can come in, apparently from real but untraceable customers, that is really dirty money you control.
- 2000UltraDeluxe 4y agoThis. Same thing with Google Play apps and similar where you can get a clean payout and you can buy gift cards for cash. Back in the days, it was done with SMS payments and "party lines" with per-minute payments.
- mekkkkkk 4y agoWhat you are saying is that the "artist" whose account the cleaned money goes to has to be in on it? I.e. no identity theft or bank account hijacking?
- hedora 4y agoInterestingly, searching for Danni Richardson on Tidal yields the following apparently real artists: Deanie Richardson Danny Richardson Dani Richardson So, they are typo-squatting as part of the scheme. I asssume money laundering would work by setting up Spotify accounts with stolen money (that they used to buy gift cards?), then streaming the fake songs. Does spotify pay artists differently for paid vs free accounts? If not, then presumably they use free accounts for the bots, so it isn't really money laundering. I guess if you get some streams from real people, then using paid bot accounts might still be a reasonably cash efficient form of money laundering.
- vintermann 4y agoDon't assume they're just targeting Spotify. Spotify is (or used to be) the best at catching algorithmic spam, the other streaming services hardly care at all. Likely they use a front service such as TuneCore which gives them access to all the streaming services. Just using Spotify is unnecessary risky if the goal is simply money laundering. (However, if the goal is to do pick up some royalties from all those background plays, and I think that's more common, then Spotify is clearly better) For an example of spam/fraud, look up the album "Angry man" on Deezer. Or rather, the albums. There are 200+ of them, all with the same stock image album art. That spammer is easily recognizable, he's been doing a similar bulk upload several times per month for maybe 10 years now. He's an example of a spammer who is present on very many streaming services. Spotify has kicked him off, though.
- vintermann 4y agoThe spammer is still at it, I see: https://www.deezer.com/search/%22From%20the%20box%22/album https://www.deezer.com/search/%22From%20the%20box%22/album
- exikyut 4y agoFWIW this is all I see, not logged in (never had an account), from AU: https://imgur.com/a/HXpn9JG https://imgur.com/a/HXpn9JG Not sure if I'm seeing something different to you...?
- kingofpandora 4y agoI'm probably missing something but how is this money laundering?
- jeremyjh 4y agoIt costs money to run the streams but Spotify pays some of that back out to the "artists"; that money sounds plausibly pretty clean. Until there was a thread at the top of HN about it and everyone suddenly knew how it worked. Of course GP might just be a GPT3 experiment...
- INTPenis 4y agoWhat does it cost an artist to run a stream? I thought Spotify hosted the content. Do you mean it costs money to run the bots that listen to the stream and get the artist recommended and heard by more people?
- VintageCool 4y agoWho knows, maybe the bots even have legitimate Spotify listener accounts.
- DownGoat 4y agoThere are services that offer bots that increases your listening count on Spotify. People with dirty money create a bunch of artists and songs on Spotify, and use the services to increase the listening count. Spotify pay out royalties based on those numbers. So they pay the service with dirty money, and get clean money from Spotify
- RHSman2 4y agoDirty in, Clean out = Laundering
- beowulfey 4y agoYou need some kind of publisher/label to get on Spotify; an individual can’t do it themselves (unless that’s changed recently). There are labels that do this for a reasonable amount of money, Like $30-50/year or so.
- jan_pike 4y agoThat...Makes a lot of sense, now that I think about it. I guess it wasn't really apparent to me before it came to my attention like this, but making online content and artificially boosting it, so you can blend your funds within what you've obtained from ad revenue is so simple, yet so brilliant. Makes you wonder what other media out there might be laundering schemes, too...
- netsharc 4y agoThere is a shitton of crap movies in Hollywood. I wonder... Of course Hollywood accounting is already "This movie took $100 million at the box office, we spent $98 million on 'marketing', using our own internal marketing company.". I guess making crap Hollywood movies loses you money rather than laundering it...
- objclxt 4y ago> There is a shitton of crap movies in Hollywood. I wonder... The movie doesn't need to be crap to be a product of money laundering! The Wolf of Wall Street[1] was infamously funded by money laundering (from the Malaysian Sovereign Wealth Fund), [1]:https://en.wikipedia.org/wiki/The_Wolf_of_Wall_Street_(2013_film)#1MDB_scandal_and_subsequent_Red_Granite_lawsuit https://en.wikipedia.org/wiki/The_Wolf_of_Wall_Street_(2013_...
- djmips 4y agoWow that's a rabbit hole! https://www.theedgemarkets.com/article/prosecution-tells-jury-follow-money-return-guilty-verdict-roger-ng-and-coconspirators-stole https://www.theedgemarkets.com/article/prosecution-tells-jur...
- unethical_ban 4y agoThat site screams "malware delivery" or spam at the least.
- 4y ago
- throwaway290 4y agoSee also Twitch streamers, Amazon listings with weird pricing, etc. Give someone poor dirty cash, let them set up accounts and buy/subscribe. You lose a percentage but you get clean money.
- colechristensen 4y agoI had my Spotify password compromised a while back and random fake generated music would play sometimes from my stereo. Very strange experience until I figured out what happened.
- user_named 4y agoThe criminal gångs in Sweden are using Spotify to launder drug money buy buying streams on artists in their circle who they also to some extent control. One of those were just murdered last year.
- dannyobrien 4y agodo you have a link or source for this story? (not sceptical, just curious)
- slac 4y agoHere is an article in the Swedish equivalent of the financial Times. https://www.di.se/digital/expert-streamingtjanster-anvands-for-penningtvatt/ https://www.di.se/digital/expert-streamingtjanster-anvands-f...
- winternett 4y agoI think I came across a YouTube video a while back that said even the platform was sponsoring fake artist accounts to recoup/claim streaming royalty payments. https://www.youtube.com/watch?v=pCAPll9A5F8 https://www.youtube.com/watch?v=pCAPll9A5F8 After years of grinding to break ground on spotify and seeing the names they promote taking the lion share of revenue it becomes very apparent that it's a cash grab that just can't be trusted. There are literally dozens of other sites that do the exact same schemes and only pay out a fraction of the revenue they rake in for doing little to nothing for artist and music discovery. The social Internet just seems more scammy than ever, and that's why I keep most of my music work offline until it gets worked into a project. Eventually there will be a correction hopefully, but the vast amount of free/unrewarded work that is being hustled out of people from these sites is not sustainable, and eventually it will turn into a content creator drought/strike if it goes unchecked too long.
- lupire 4y agoYou shouldn't expect to profit if your product is completely substitutable with another 0 cost product (generic background music)
- dustinmoris 4y agoHow is this money laundering? If you use dirty money to sign up to Spotify and listen to specific songs so that you get some of the money “clean” back wouldn’t that in case of Spotify be the dumbest and most inefficient way of laundering in the history of money laundering? I mean doesn’t Spotify keep the majority so you’re essentially donating dirty money into the stock price of Spotify for the most part, no?
- shp0ngle 4y agoYou pay for robots and stolen accounts, you got money per listens. Spotify doesn’t really get your money at any point. The bots don’t need to be Spotify Premium.
- scatters 4y agoSpotify supposedly pays around 70% of subscription and advertising revenue to labels and rights holders. Since payments are not pro rata per listener but are aggregated over all listens, if your fake customer streams more than the average you could quite possibly make an actual profit from this technique.
- yesbabyyes 4y agoNot necessarily. Let's say you get a burner phone and hook it up at home. You need internet and electricity of course. Buy a Spotify gift card for $10 USD cash, use that to get Spotify Premium (first use the three months free of course). Play your (artists') songs, 30 seconds each (considered one stream by Spotify). That's 2880 streams per hour, 86400 streams per month. Spotify pays around $2-$4 USD per 1000 streams, so that's ~170-340 USD clean money coming in. Some of that goes to Amuse/TuneCore/etc. Then music production, admin, etc. But there seems to be quite some money to be made, especially once you manage to fake your way into recommendations and get legit streams as well.
- raunak 4y agoSorry, but wow you got this wrong. I’m not sure if it was just a guess or something, but look at the comment below for what it actually is. The money laundering is in the form of purchasing botted streams.
- nosianu 4y agoThat's really interesting - although when I read that story I thought the point was the broken recommendation system. Happens to me a lot on Youtube too - you watch just one thing - and now your recommendations are full of things like that one thing. Or Facebook/Youtube, somehow: I watched a single video on Youtube about Viking sword fighting and suddenly my people recommendations on Facebook were at least 20% militaria fans, always visible from the profile picture already. It finally stopped but it took well over half a year. That's why I thought this story was about recommendation systems recommending either only narrowly what you already know, and finding something new is not really well supported or not better than random, or that one outlier can skew your recommendations for a long time. Worst is there is no way to tell the system "stop recommending me this kind of stuff" at least for the second problem, no manual way to make adjustments for the user.
- merijnv 4y ago> Happens to me a lot on Youtube too - you watch just one thing - and now your recommendations are full of things like that one thing. Spotify's recommendation system is much better than youtube's (at least for me). I frequently "joke" that it is one of the few applications of ML that actively make my life as a consumer better. Having been following Spotify's "Discover Weekly" for several years now, I'm actually really impressed how it manages to blend my long-term taste with recent moods. If I've been listening to one type of music for 1 or 2 weeks, there will be a noticeable uptick of it in the recommendations, while still mixing in less recent tastes.
- midasz 4y agoAs a father of a young child, Spotify's algo's are completely useless to me. If their ML is so smart it should be able to determine that Row row row your boat doesn't mix well with Anthrax. Wish I'd be able to toggle 'don't recommend kids music' somewhere.
- hakanensari 4y agoDon't these end up in separate mixes, though? My 13 year old makes a lot of grime requests on road trips etc. and now I have a separate grime mix under my top mixes.
- ogrisel 4y agoThere is a similar problem with the YouTube recsys on cheaply generated videos (e.g. a physics + 3d rendering model to generate colorful videos of Spiderman and Batman driving colliding cars). See this older piece by Natasha Lomas on Tech Crunch: I watched 1,000 hours of YouTube Kids’ content and this is what happened… http://tcrn.ch/2iPXpIA http://tcrn.ch/2iPXpIA
- rawoke083600 4y agoSomewhat similar, I'm not really a tik-tok-fan, but after watching a LinusTechTips video with "KallMeKris" I was hooked on her content (one woman plays like 20 characters, yea yea judge me later :P ). Anywhoo I was surprised to find close to 20 Youtube accounts that only has like stitched-together 1 hour videos of all her content. With non a none negligible view count.
- yrlihuan 4y agoVery likely that the "musicians" that create those "music" are actually AIs.
- vishnugupta 4y agoThis happens in almost every company that acts as intermediary between buyers and sellers, I.e., a marketplace. Uber had (still has?) similar challenge where fake drivers were created, who took fake rides to liquidate stolen credit cards.
- amelius 4y agoDoesn't it leave a money trail?
- alliao 4y agohmm would this apply to steam as well? people buying up weird fake cards and on sell for less but cleaner money?
- lizardactivist 4y agoHow do the scammers get the money if they use someone else's (stolen) identity and bank account? Also, how do they succeed in keeping this scheme for more than a few days after the identity theft is noticed and reported to the police? And why would they not just take the very music they just bought and paid for, and publish that as any other artist do? There's no crime in buying the rights from another artist -- that's exactly what all music labels do.
- noitpmeder 4y agoMy take was that it's about getting _some_ of the dirty money out. So the dirty cash they are spending to fund this campaign is returning some % worth of Spotify commission. Even better if it somehow hooks the algorithm to recommend it to non-botted accounts.
- hn_throwaway_99 4y ago> How do the scammers get the money if they use someone else's (stolen) identity and bank account? Because if you have a stolen identity and open a bank account, as long as that account isn't trying to defraud the bank (e.g. write bad checks, commit ACH fraud), it can go on living for a long time before it's discovered and closed. In this case, they opened up a bank account with stolen identity, and then used that to get their Spotify payouts, and then eventually transferred that to another account (cash, crypto, whatever). From that bank's perspective, unless they were specifically informed of the bad account, there wouldn't be a ton of unusual activity that would flag the account.
- pessimizer 4y ago> Also, how do they succeed in keeping this scheme for more than a few days after the identity theft is noticed and reported to the police? Why would a stolen identity not being used to steal from the person whose identity was stolen, but just to process legal payments, be noticed in a few days? Or even a few years? Maybe at some point the IRS might find the account that used my identity and send me an angry letter, but that seems like it would be years down the line.
- pachico 4y agoDoesn't that imply to have millions of Spotify accounts to be used by the bots? Is that still profitable?
- lupire 4y agoMoney laundering is profitable because the money put in is devalued dirty money, more like a raw material input.
- eadmund 4y agoI wonder how much of the traditional music and theatre businesses has been money laundering. One could put out a record (which presumably has a nice margin on it) and pay folks a small amount of money to buy many many many copies of the records with cash, turning the dirty funds into clean ones. Likewise with a theatre production and ticket sales. Seems like any business with significant cash inputs would be vulnerable to this. And of course it would make it very difficult for legitimate businesses to survive: they would lack the implicit subsidy that the illegitimate businesses get.
- user3939382 4y agoI used to work in the music industry and gaming the charts was common.
- notnaut 4y agoArt and publishing too
- dylan604 4y agoBy theater, what type of theater are you meaning? Stage performances like plays? If you put on a crap play, the critics will lambast it for the sham it is, and then no more ticket sales.
- bfgoodrich 4y ago
- deleted 4y ago[deleted]
- TomMasz 4y agoYou have to wonder about the economics of this scheme. The music probably isn't expensive to produce and clone, but Spotify pays so little per stream, how is it viable to purchase bot streams in large quantities?
- adamsmith143 4y agoSo the interesting bit is that there are hundreds of thousands or millions of Bot accounts streaming music on Spotify? Wouldn't this have massive implications for their Ad Revenue model?
- saaaaaam 4y agoI worked in music distribution and maintain a very active interest in this space. This is actually fairly unlikely to work, from three different standpoints: operational logistics of how money moves around; technical logistics; and economics. I’m not saying that it never works - and I’m not saying that this was not happening in the past (in fact, it almost certainly was) but the chances of it happening today are really pretty low. Here’s why - and I’ll also talk about what is more likely to be the reason for these tracks. 1. Operational Logistics Although streaming activity is reported in real time Spotify accounts usage to labels and distributors in the middle of the month following the month in question. The label/distributor then invoices and receives payment. Depending on the deal the label or distributor has with Spotify they will be paid on a defined cycle. This may well be NET 30 EOM - meaning that when the distributor raises the invoice it will be paid 30 days after the end of the month in which it was raised. 2. Technical logistics Both Spotify and distributors identify and flag unusual streaming activity. If you bot 1 million fraudulent streams this activity may well be removed in between the streams happening and payment being made. If a distributor sees sudden spikes in activity they may well hold payment until they can identify whether or not the streams are genuine. Streaming fraud is a hot topic - and it’s obviously fairly easy to identify “non-human” activity when you have end to end control of the streaming platform. Spotify has historically significantly reduced play count on tracks they think are botted: today I’d be surprised if many botted streams are even counted against tracks. 3. Economics Essentially this is an arbitrage situation - can you get enough streams to drive more revenue than the amount you are paying for the fake streams? The answer is almost certainly no. Let’s say you’ve got 1000 accounts that are going to be your bot farm. There’s a lot of work is going to have to go into getting those accounts to stream in a human-like way. Because Spotify does not have a user centric royalty model (where the subscription payments of a user go proportionately to the artists they stream) there is no fixed “amount per stream” - only broad indicators. Streams from premium accounts pay a far higher rate than streams from ad supported accounts. Roughly speaking a million premium streams is going to bring you somewhere in the region of $4000-5000 dollars. If your bot farm is 1000 premium accounts then that’s costing you $10,000 a month. You’re going to have to have a certain amount of hardware - or hardware emulation - as if the streams on a certain track are all coming from web, and from the same network, that’s much more likely to flag than streams distributed across web, Spotify desktop app and Spotify mobile. Now, sure, you can pay someone who already has the bot farm - but there are then three risks: first of all, that they take your money and run; second, that their bot farm gets flagged and the streams don’t pay through; third that Spotify doesn’t pay out on the streams. So assuming that you’ve set up your own bot farm investing in 500 cheap android phones and doing the rest with emulation there’s a lot of cost - at least $10,000 a month. Can you drive 5m streams a month? Well, each node in your bot farm would need to stream the track 5000 times a month. Is that going to look strange? For sure. There’s also the question of finding distributors who are going to pay out easily and quickly if you can even convert the fraudulent streams to cash. What is actually happening here? Well, mood music - ambient music, ambient electronic - is a really important part of the “make music happen” sell of Spotify. A lot of people don’t want to hear the hits. They want music to play while they work or run or cook or have a shower. And for these kinds of “activity driven” or “event driven” music it’s important that the flow of a curated playlist works. You might have ten great tracks by known artists, but the transition between those tracks doesn’t work. Spotify has (according to media) begun commissioning songwriters to write these “filler” or “transitional” tracks. There was a huge tabloid storm whipped up about this by a music journalist some time back who said he’d unveiled a whole stable of “fake artists”. Spotify wants people to keep listening to music. I suspect - but have no direct insight into this - that people who listen to a lot of ambient playlists are particularly valuable subscribers - they will almost certainly be paying (as you don’t want your flow interrupted by ads) and they will almost certainly be over indexing against usage. They are probably also less likely to churn because of the lock in of saved playlists etc. It’s also quite likely that a lot of these custom transitional tracks are not available on other platforms so you may not even be able to replicate a saved playlist.
- vinay_ys 4y agoThe scam part here is that listen traffic is bot-generated? Irrespective of that, on the payout side, why do you need stolen identities? It is Spotify paying out legitimately, isn't it?
- i_love_limes 4y agoThis thread has quietened down now, so I'd like to ask about those forums you were talking about. I'm really curious about them and would love to have a closer look, but I completely understand if you don't want to divulge that kind of information.