A Google software engineer was arrested after federal prosecutors accused him of using non-public company data to win $1.2 million betting on Polymarket. The case is one of the first federal insider trading prosecutions targeting a decentralized prediction market.
Michele Spagnuolo, a 36-year-old engineer at Google, was taken into custody on May 27 after a federal complaint was unsealed in the Southern District of New York. He faces charges of commodities fraud, wire fraud, and money laundering. He was released on a $2.25 million bond.
How the scheme allegedly worked
Between roughly 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. Google publicly released its annual search results on December 4, 2025. After those results went live, Spagnuolo’s positions reportedly paid off to the tune of $1.2 million in profits.
Among his bets was a prediction that d4vd, the rising artist, would be named the top-searched person of 2025.
The wallet linked to the activity, known as “AlphaRaccoon,” had previously been flagged for a suspicious accuracy rate on Google-related markets. A Meta engineer had publicly highlighted that the wallet achieved a 22-out-of-23 success rate on these specific contracts.
A pattern of prediction market prosecutions
Spagnuolo’s case doesn’t exist in isolation. 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.
Traditional financial markets have decades of case law and regulatory infrastructure built around insider trading. The Commodity Futures Trading Commission oversees some aspects of platforms like Polymarket, which is why Spagnuolo faces commodities fraud charges. 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.