Google engineer charged with insider trading on Polymarket using search data
In brief
- Michele Spagnuolo, Google engineer since 2014, charged May 27 with commodities fraud and wire fraud in Southern District of New York.
- Prosecutors allege Spagnuolo accessed confidential Year in Search 2025 data to place bets under alias AlphaRaccoon on Polymarket.
- Between October–December 2025, Spagnuolo risked $2.75M across 16 bets and won approximately $1.2M in profits.
- First federal prosecution applying insider trading law to decentralized prediction markets.
The Alleged Scheme
Spagnuolo accessed non-public data classified as "Google Confidential" from his employer's internal tools. Between mid-October and early December 2025, he placed at least 16 bets on Polymarket tied to Google search trends, using the trading alias "AlphaRaccoon." His most notable win came from correctly predicting that D4vd, the singer whose real name is David Anthony Burke, would be the most-searched person on Google for 2025.
The numbers tell the story. Spagnuolo risked approximately $2.75 million across his positions and walked away with around $1.2 million in profits. By December 2025, the pattern of suspiciously accurate bets on Google-related events raised red flags. He was arrested and released the same day on a $2.25 million bond.
Regulatory Precedent
This is one of the first federal prosecutions to explicitly apply traditional insider trading principles to a decentralized prediction market. The government isn't treating Polymarket as a gray-area crypto product — it's treating bets placed on the platform as commodities transactions subject to the same laws that govern futures markets.
Spagnuolo faces one count under the Commodity Exchange Act, which carries a maximum penalty of 10 years in prison, and wire fraud charges that carry a maximum of 20 years.
Market Response
Polymarket moved quickly. The platform updated its market integrity rules in response to the AlphaRaccoon trading activity, adding explicit prohibitions against placing trades based on non-public confidential information.
If courts uphold the charges, the precedent could ripple outward. Platform operators may need to implement more rigorous compliance frameworks, including know-your-customer procedures and surveillance systems designed to detect patterns of insider activity. Anyone with access to material non-public information — whether they work at Google, a government agency, or a sports league — now has a clear signal that the feds consider using that information to place bets a federal crime.
