Google engineer charged with insider trading on Polymarket prediction market
In brief
- Michele Spagnuolo charged with commodities fraud, wire fraud, and money laundering.
- Allegedly exploited confidential Google Trends data to profit $1.2M+ on Polymarket using alias AlphaRaccoon.
- Second federal insider trading case involving prediction markets; regulators treating platforms as conventional financial markets.
Alleged Scheme
Spagnuolo allegedly used confidential Google Trends data to trade on markets that Polymarket introduced in late 2025 tied directly to Google search trends. His access to proprietary information as a Staff Information Security Engineer at Google gave him a decisive edge over other traders. The scheme generated over $1.2 million in profits before prosecutors shut it down.
Spagnuolo, an Italian citizen living in Switzerland, was released the same day on a $2.25 million bond.
Regulatory Implications
This is the second known federal criminal case involving insider trading on a prediction market platform. The first involved a US Army soldier. The charges signal a shift in how regulators approach these platforms. Prosecutors brought commodities fraud charges, indicating that regulators view prediction markets through the same lens as conventional financial markets—not as unregulated novelties.
Markets tied to proprietary data from specific companies, such as Google search trends, app store rankings, and streaming viewership numbers, are most exposed to insider trading. Polymarket's decision to create markets around real-time search data created an attractive target for someone with access to that information.
Why Prediction Markets Are Easier to Prosecute
Blockchain-based platforms create permanent, traceable records of every transaction, which makes them easier to investigate than many traditional trading schemes. Every bet Spagnuolo placed under "AlphaRaccoon" left a digital trail. Law enforcement didn't need to reconstruct wire transfers or phone records—the blockchain did the work for them.
The sentencing exposure is severe. Commodities fraud alone carries a potential sentence of up to 10 years. Wire fraud and money laundering each carry maximums of 20 years.
