Google engineer charged with insider trading on Polymarket prediction market
In brief
- Michele Spagnuolo, Google engineer, charged with using confidential search data for Polymarket bets.
- Spagnuolo allegedly wagered on D4vd becoming top-searched person using restricted Google trend access.
- First federal insider trading charges against decentralized prediction market, marking regulatory escalation.
The Alleged Scheme
Spagnuolo, operating under the Polymarket alias "AlphaRaccoon," allegedly had access to non-public search trend data restricted to a limited group of Google employees. Between October and December 2025, he placed a series of bets predicting that singer D4vd would be named the top-searched person in Google's Year in Search 2025.
On December 4, 2025, Google made that result official. The timing proved lucrative for Spagnuolo's bets.
Decentralized Markets, Federal Scrutiny
The case appears to be the first time federal prosecutors have brought insider trading charges involving a decentralized prediction market. Polymarket, which operates on the Polygon blockchain, has grown into one of the most prominent prediction markets in crypto. It surged in visibility during the 2024 US presidential election, when its betting odds became a fixture of cable news coverage.
Prosecutors view Polymarket contracts as commodities, as evidenced by the commodities fraud charge. Every transaction on Polygon is recorded on a public ledger, and the "AlphaRaccoon" account's betting pattern would have been visible to anyone looking closely.
Regulatory Implications
US Attorney Jay Clayton's office pursued the case as part of a broader push to prosecute offenses that undermine market integrity. Polymarket itself previously settled with the CFTC in 2022. The Spagnuolo case signals that federal authorities are extending insider trading enforcement into decentralized markets, where anonymity and blockchain transparency can coexist in unexpected ways.
