Google Engineer Charged for Using Internal Data to Place $2.7M Bet
▼ Summary
– Michele Spagnuolo, a Google information-security engineer, was charged with using internal Google search-trend data to bet $2.7 million on Polymarket and profit $1.2 million on 2025 Google Year-in-Search contracts.
– The case is the second federal criminal prosecution tied to Polymarket and the first involving misappropriated information from a major Silicon Valley company.
– Spagnuolo placed 25 bets under the handle “AlphaRaccoon,” including large wagers against Bianca Censori and Pope Leo XIV, and a near-zero-probability bet on D4vd, who won.
– The charges include commodities fraud, wire fraud, and money laundering, with prosecutors using the commodities-fraud statute to apply insider-trading law to a prediction-market trade.
– Spagnuolo was arrested in Switzerland and is cooperating with extradition, while Polymarket faces increased regulatory scrutiny from the US House Oversight Committee and bans in Spain and India.
Federal prosecutors have charged a Google engineer with using confidential internal data to place $2.7 million in bets on Polymarket, netting $1.2 million in profits. The case marks the second federal criminal prosecution tied to the prediction-market platform and the first involving stolen data from a major Silicon Valley company.
Michele Spagnuolo, a 36-year-old information-security engineer based in Switzerland, allegedly accessed non-public Google search-trend data through an internal tool and placed 25 separate bets under the account name “AlphaRaccoon.” The bets targeted Polymarket’s 2025 Google Year-in-Search contracts, which predicted the top-searched terms and people of the year.
According to the indictment filed in the Southern District of New York, Spagnuolo wagered nearly $1 million that Bianca Censori, Kanye West’s wife, would not top the list. He also placed more than $600,000 against Pope Leo XIV and took a significant position on singer D4vd, whose odds Polymarket had set at near zero. When Google announced D4vd as the winner on December 4, 2025, Spagnuolo’s account turned a $1.2 million profit. He then removed the “AlphaRaccoon” alias and transferred the winnings out of the associated cryptocurrency wallet.
The charges include commodities fraud, wire fraud, and money laundering. The Commodity Futures Trading Commission has filed a parallel civil case. This prosecution is notable because it applies securities-style insider-trading law to a prediction-market trade, a legal frontier that has been largely untested. Since Polymarket’s contracts are regulated as derivatives by the CFTC, not as securities by the SEC, prosecutors used the commodities-fraud statute to cover manipulation across any CFTC-regulated market.
The case arrives amid increasing regulatory pressure on Polymarket. Last Friday, the House Oversight Committee, chaired by James Comer, launched a probe into whether customers are using non-public information to trade on Polymarket and rival platform Kalshi. Spain blocked both platforms on Tuesday over gambling-license concerns, and India formally blocked Polymarket on May 21.
Earlier this year, a U. S. soldier was charged with using inside information to bet on Venezuelan political outcomes, netting roughly $400,000. That was the only public criminal case tied to Polymarket until now. The Spagnuolo charges represent a significant escalation, involving a senior Silicon Valley engineer rather than a single soldier.
Polymarket founder Shayne Coplan pushed back against the broader insider-trading narrative on Tuesday, arguing that the platform’s pricing dynamics can withstand small numbers of informed traders. Whether that argument holds up after this prosecution remains an open question. The Year-in-Search market was reportedly small enough that a $2.7 million position was visible in the order book. Polymarket’s surveillance team has not publicly explained why the position wasn’t flagged before the December results.
Spagnuolo was arrested in Switzerland and is reportedly cooperating with the extradition process. Google has not yet commented on whether it plans to pursue civil action against its former employee.
(Source: The Next Web)
