Key Takeaways:
- Google engineer Michele Spagnuolo was charged with insider trading using Polymarket.
- Operating as “AlphaRaccoon,” he used private “Year in Search” data to net $1.2 million.
- The unsealed federal complaint marks the second major insider trading case on the platform.
Federal prosecutors charged a Google software engineer with insider trading after alleging he used confidential company data to make more than $1.2 million on the prediction market platform Polymarket. The growing polymarket insider trading investigation has drawn significant attention from regulators and the crypto betting industry.
The U.S. Justice Department said Michele Spagnuolo, a 36-year-old Google employee, used nonpublic internal search data tied to Google’s “Year in Search 2025” campaign to place profitable wagers under the online alias “AlphaRaccoon.” Prosecutors said Spagnuolo wagered more than $2.7 million on prediction contracts tied to the company’s annual search rankings.
According to court documents unsealed in the Southern District of New York, Spagnuolo allegedly accessed confidential information about trending celebrity searches before the data became public. Authorities said he used the information to predict outcomes on Polymarket, a blockchain-based prediction market platform. Prosecutors argued the polymarket insider trading scheme gave him an unfair advantage over regular traders.
“As alleged, Spagnuolo violated the duties he owed to his employer and used Google’s confidential business information to make more than $1.2 million in trading profits on Polymarket,” U.S. Attorney Jay Clayton said in a statement. “Insider trading compromises the integrity of our markets.”
Google places employee on leave during probe
Google said the employee has been placed on leave while the investigation continues. The company added that it is cooperating with law enforcement authorities.
“The employee accessed our marketing material using a tool available to all employees, but using such confidential information to place bets is a serious breach of our policies,” a Google spokesperson said in a statement. The company has not commented further on the ongoing polymarket insider trading investigation.
Federal prosecutors charged Spagnuolo with commodities fraud, wire fraud and money laundering. Authorities alleged he later attempted to conceal the origin of his winnings through cryptocurrency transfers and privacy tools. The charges add to growing regulatory scrutiny surrounding polymarket insider trading concerns in blockchain-based prediction markets.
Court filings said Spagnuolo used internal Google tools to monitor search trends connected to celebrities and public figures. One of the wagers reportedly involved predictions tied to singer D4vd becoming one of the year’s most-searched individuals.
Spagnuolo has worked at Google for more than 12 years, according to his LinkedIn profile and media reports. Reuters reported that he is an Italian citizen living in Switzerland.
Polymarket highlights cooperation with investigators
Polymarket said it cooperated closely with federal investigators and regulators during the case. The platform said blockchain-based transactions allow authorities to trace suspicious trading activity.
“Polymarket worked closely with the U.S. Attorney’s Office for the Southern District of New York and the CFTC,” a company spokesperson told TechCrunch. “Blockchain trading is transparent, traceable, and bad actors leave footprints.” The company said transparency tools can help investigators detect polymarket insider trading patterns more effectively.
Prediction markets such as Polymarket and Kalshi allow users to place wagers on political, business and cultural events. While insider trading is prohibited, prosecutors said some traders continue to exploit nonpublic information for financial gain.
The case follows another recent Justice Department prosecution involving a U.S. Army soldier accused of using insider military information to make roughly $400,000 on Polymarket wagers tied to a Venezuelan operation.
