According to the indictment in Manhattan federal court, "these royalties were taken from a royalty fund that streaming platforms must set aside for artists who broadcast sound recordings that incorporate musical compositions," the indictment states.
Certainly his ethics as a musician are quite questionable and his methods were not the most noble, but many internet users question whether he really should have been arrested for fraud.
It is worth mentioning that these platforms have systems that identify this type of practice and delete the accounts, but Smith managed to circumvent them all for years in an exceptional way. The fact that they are considered frauds is one of the arguments that claim that his arrest is more than fair, as he artificially leveraged his numbers.