Kalshi Paid Out Fake Winners After Spotify Chart Manipulation Cost It Thousands

Published by James Harris on July 3, 2026July 3, 2026

Prediction market traders on Kalshi bet roughly $3 million on which song would top Spotify’s U.S. charts in June. Someone apparently decided the cleaner path to winning was buying fake streams rather than picking the right track.

Spotify confirmed it removed approximately 500,000 artificial streams from Malcolm Todd’s “Earrings” after the song’s overnight surge, which one trader calculated had about a 1 in 77 octillion chance of occurring naturally, flagged the manipulation. Kalshi had already paid out winners before Spotify corrected the chart, meaning the platform absorbed a loss on a market it should have stress-tested before listing. This follows a pattern that Vitalik Buterin identified after a separate April incident, in which a Polymarket trader allegedly used a hand dryer to manipulate a temperature sensor at a Paris airport to win a $34,000 weather bet: prediction markets that rely on a single, gameable data source are structurally vulnerable to exactly this kind of low-cost attack.

The oracle problem is not new, but the Spotify case makes it harder to dismiss as an edge case.

Amanda Fischer, a former SEC chief of staff, told WIRED that platforms are required to verify their contracts aren’t susceptible to manipulation before listing them, and that in this market and many others, they are not doing that. That framing matters because Kalshi operates in a regulated environment, having won a court battle to offer event contracts in the U.S., which means regulators now have a documented, specific failure to examine rather than a theoretical concern. Kalshi still lists dozens of contracts tied to Spotify and Billboard chart results, and Spotify has since said it will add additional checks before publishing chart data and has asked both Kalshi and Polymarket to remove its logo from their sites, given it has never partnered with either platform. The artist, Malcolm Todd, has not been implicated.

Caleb Davies, the Minneapolis-based trader who first identified the anomaly and has earned an estimated $1.2 million across betting platforms, said he is stepping away from chart-based markets entirely despite their profitability. When the person best positioned to exploit these markets decides the manipulation risk outweighs the edge, that is a more meaningful signal about market integrity than any regulatory statement.

Kalshi says it is actively investigating, and no one has yet identified who purchased the fake streams or confirmed their exact motive. Whether regulators treat this as a compliance failure by the platform or pursue whoever ran the bot campaign will define how seriously the event contracts industry takes manipulation risk going forward.