Google engineer charged with insider trading on Polymarket prediction market
In brief
- Michele Spagnuolo, 36, arrested May 27 for using non-public Google search data to trade on Polymarket
- Spagnuolo placed 16 large wagers between October and December 2025, winning $1.2 million after Google's Year in Search results went live
- First federal insider trading prosecution targeting a decentralized prediction market
- His wallet AlphaRaccoon achieved 22-of-23 success rate on Google-related contracts before being flagged
- Southern District of New York applies Wall Street insider trading expertise to crypto prediction platforms
The Bet
Between October and December 2025, Spagnuolo purportedly made 16 large wagers on Polymarket using internal, non-public data related to Google's Year in Search 2025 report. One bet predicted that d4vd, a rising artist, would rank as the top-searched person of 2025—a prediction that paid off after Google publicly released its search results on December 4, 2025.
The wallet linked to his activity, known as AlphaRaccoon, had already drawn scrutiny from the prediction market community. A Meta engineer had publicly highlighted that the wallet achieved a 22-out-of-23 success rate on Google-related contracts—an accuracy rate that raised red flags among traders and observers.
Regulatory Expansion
The case is one of the first federal insider trading prosecutions targeting a decentralized prediction market. It signals that regulators are extending enforcement authority into crypto-native platforms, not just traditional finance.
The Commodity Futures Trading Commission oversees some aspects of platforms like Polymarket, which is why Spagnuolo faces commodities fraud charges. This case isn't isolated. It follows a parallel investigation into US Army Master Sergeant Gannon Ken Van Dyke, who was charged in April 2026 for allegedly placing a roughly $400,000 bet on Polymarket using classified information.
The Southern District of New York, the same office that has historically prosecuted the biggest insider trading cases on Wall Street, is now applying that expertise to crypto-native prediction platforms. The message is clear: prediction markets aren't exempt from insider trading law, and enforcement is escalating.
