Spotify has demanded Kalshi remove its logo from the prediction market platform after manipulated streams affected the settlement of its Spotify-based betting market.
summary
- Spotify asked Kalshi and Polymarket to remove its logo after manipulation of the streaming-based prediction market.
- More than 500,000 fake Spotify streams are said to have impacted the market for something related to Malcolm Todd’s song.
- The dispute comes as the CFTC investigates Polymarket and seeks new rules for prediction markets.
According to Bloomberg a reportSpotify has asked both Kalshi and Polymarket to remove its branding from their platforms and clarify that neither company has any partnership with the music streaming service. The request comes after the discovery of manipulated streaming activity that affected the prediction market associated with Spotify’s monthly US music charts.
Spotify reportedly detected and removed more than 500,000 artificial streams that pushed Malcolm Todd’s song to the most streamed tracks on the platform in the US for the month. Calcci had already settled on the market based on which song would end up as the most streamed song on Spotify in the US during that period, making the manipulated streams directly relevant to the outcome.
Regulatory scrutiny around prediction markets has intensified
Meanwhile, prediction market operators are facing increased interest from US regulators. Such as crypto.news I mentioned Earlier, the Commodity Futures Trading Commission opened an investigation into Polymarket that extends across several parts of its business, including its social media operations.
The investigation comes on the heels of a Wall Street Journal report claim Polymarket has hired dozens of mostly college-age content creators to post staged trading videos aimed at attracting new users. Bloomberg later reported that the CFTC’s inquiry is not limited to those marketing practices and covers additional aspects of the platform’s operations.
Separately, state regulators have continued to challenge prediction market platforms, arguing that some contracts operate as unlicensed sports betting products. Meanwhile, the CFTC filed lawsuits against several countries Emphasizing that it has the exclusive authority to regulate prediction markets subject to federal supervision.
The organizer is too Seek public feedback On proposed rules for prediction markets that address concerns about insider trading and market manipulation. According to the CFTC, comments on the proposal will be accepted until July 31.
Kalshi’s settlement has drawn criticism from a senior trader
Criticism of Kalshi’s handling of Spotify’s marketplace has also come from within its trading community. Caleb Davis, a trader who estimates he has earned more than $1 million on the platform, accused Calci of flattening the market despite repeated warnings that Malcolm Todd’s sudden rise in the Spotify rankings warranted further investigation.
In a public statement, Davies claimed that Calci was aware of suspicious trading conditions while continuing to offer liquidity bonuses tied to one of the affected contracts. He questioned whether the platform prioritizes collecting trading fees over addressing potential market manipulation.
Spotify’s demand also extends to Polymarket as it lists similar prediction markets based on Spotify’s live streaming performance. According to Bloomberg, the company wants both platforms to stop displaying its logo and make it clear that they are not affiliated with Spotify, as markets tied to streaming ratings could encourage participants to artificially inflate song plays in an attempt to profit from prediction contracts.
The dispute adds another layer of pressure on operators of prediction markets, as regulators examine how these markets are managed and whether incentives tied to real-world events can create opportunities for manipulation.
