Google Engineer Charged With Insider Trading on Polymarket

The U.S. Justice Department has charged Michele Spagnuolo, a Google software engineer, with insider trading for allegedly using confidential company data to generate $1.2 million in profits on the prediction market platform Polymarket [1]. Prosecutors claim the 36-year-old employee, who operated under the pseudonym “AlphaRaccoon,” leveraged internal information regarding Google’s annual “Year in Search” marketing campaign to place successful wagers [2].

Key takeaways

• Michele Spagnuolo, a Google employee since 2014, is accused of using internal search data to inform bets on trending search topics [2].
• The defendant allegedly risked over $2.7 million on wagers related to Google’s 2025 “Year in Search” campaign [1].
• Spagnuolo faces charges of wire fraud, money laundering, and violating the U.S. Commodity Exchange Act [2].
• Polymarket stated it cooperated with the U.S. Attorney’s Office and the CFTC during the investigation [1].
• Google has placed the employee on leave and is assisting law enforcement with the ongoing probe [2].

Exploiting internal search trends

According to the federal complaint, Spagnuolo accessed confidential internal data regarding the most-searched celebrities of 2025 before the information was made public [2]. The investigation alleges that Spagnuolo adjusted his trading strategy between October and December of last year as the internal data evolved [2]. For instance, the complaint notes that he initially bet on Kendrick Lamar to top the search trends but shifted his wagers to alt-pop singer D4vd after internal metrics showed a surge in searches for the artist [2].

The FBI eventually traced the cryptocurrency payments linked to the “AlphaRaccoon” account back to Spagnuolo [2]. While Google confirmed that the marketing material used for the bets was accessible through a tool available to all employees, the company characterized the use of such information for personal profit as a serious violation of corporate policy [1]. Spagnuolo, an Italian citizen residing in Switzerland, could face years in prison if convicted of the charges [2].

Why it matters

This case highlights the growing regulatory scrutiny surrounding prediction markets, which allow users to bet on a wide array of real-world events [1]. Polymarket has emphasized that its use of blockchain technology allows for transparent and traceable transactions, noting that it is the only prediction platform to date whose cooperation has resulted in U.S. insider trading charges [2].

The incident follows a similar case from last month, in which a U.S. Army soldier was charged with making $400,000 on Polymarket by using classified information regarding a military operation in Venezuela [1]. As these platforms gain popularity, the industry is facing pressure to implement stricter guardrails, with Polymarket recently updating its rules to explicitly prohibit trading based on confidential information or the ability to influence event outcomes [2].