A Kalshi trader spotted strange spikes in Spotify streams that hinted at manipulation just before the platform settled a $3.3 million prediction market tied to Spotify’s daily U.S. charts. The trader urged Kalshi to delay the payout while the suspicious activity was reviewed, but the exchange paid out shortly after responding, only a day before Spotify removed over 500,000 fake streams from the winning track.

This market, launched in June, revolved around which artist would top Spotify's U.S. daily chart. Trading volume reached an impressive $3,320,917. Caleb Davies, the trader who flagged the anomaly and lost $4,500 when the market closed, shared internal communications revealing Kalshi was informed of potential artificial streaming before settling.

Davies initially messaged Kalshi CEO Tarek Mansour about sudden, unusual increases in U.S.-only streaming data for several songs near June’s end. Mansour passed the concern to Robert DeNault, Kalshi’s head of enforcement and legal counsel. Davies provided detailed data showing how certain tracks’ streams and related market trades didn’t align with typical patterns. He specifically asked that Kalshi pause settlement until a thorough investigation could be completed.

DeNault replied that Kalshi was looking into the matter but suggested the main manipulation concerns were with another platform, Polymarket, not Kalshi itself. Still, Kalshi went ahead and settled the market minutes after their final response.

The standout case was Malcolm Todd’s song “Earrings,” which climbed nearly 70% in streams in a single day to reach No. 1 on the U.S. chart on June 29. Davies calculated that this jump had a probability so low it was essentially impossible to occur naturally, calling it an 11.24 sigma event a statistical anomaly far beyond random chance. Most other songs dropped in ranking that day, except a few, including two Davies had already raised suspicion about.

Before the surge, traders valued the “Earrings” outcome at around 2.5%, meaning a roughly twentyfold return awaited those who bet on it. Davies noted that the competing platform Polymarket did not offer bets on “Earrings,” and suggested Kalshi’s records could expose who accumulated positions just before the spike. DeNault responded that only Spotify could confirm whether the streaming data was legitimate.