Google Engineer Placed Bets on Polymarket Using Internal Data, Charged with Insider Trading for $1.2 Million in Profits
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Google Engineer Placed Bets on Polymarket Using Internal Data, Charged with Insider Trading for $1.2 Million in Profits
This is the second federal charge in the prediction markets space arising from insider information.
Navigating Web3 tides with focused insightsAuthor: Stephen Katte
Translated by: TechFlow
TechFlow Intro: On the same day, the U.S. Department of Justice (DOJ) and the Commodity Futures Trading Commission (CFTC) filed charges against a Google software engineer, accusing him of using Google’s non-public internal data to place precisely timed bets on Polymarket and profit $1.2 million. This marks the second federal insider trading case in the prediction market space—occurring just as Congress launched an investigation last week into insider trading practices at Polymarket and Kalshi.
U.S. authorities have filed criminal charges against a Google employee, alleging he used confidential company information to place bets on Polymarket and earned $1.2 million.
The DOJ announced on Wednesday here that it had unsealed charges against Google software engineer Michele Spagnuolo, accusing him of accessing Google’s non-public internal information and subsequently placing 25 bets totaling $2.7 million on Polymarket markets related to “the most-searched person on Google in 2025.”
Prosecutors stated that Spagnuolo operated the Polymarket account “AlphaRaccoon.” In December last year, when Google released its annual list of top-searched people, this account earned $1.2 million betting on outcomes widely perceived as unlikely.
The Commodity Futures Trading Commission (CFTC) filed a parallel civil complaint against Spagnuolo on the same day, as reported here, with identical allegations.
Insider trading in prediction markets is drawing increasing regulatory scrutiny. Last Friday, the U.S. House of Representatives launched an investigation into Polymarket and Kalshi, questioning how the two platforms responded to insider trading incidents. Lawmakers expressed concern that government officials may be exploiting non-public information to place profitable bets.
In a statement, Manhattan U.S. Attorney Jay Clayton said these charges “reaffirm a decades-old principle: corporate insiders may not use confidential business information to profit in the markets.”
Caption: Source — U.S. Attorney’s Office for the Southern District of New York
The “AlphaRaccoon” Account Was Renamed After the Fact
Court documents show that in December last year, communities on Discord and X began discussing the possibility that AlphaRaccoon was a Google insider. Shortly thereafter, the username was changed to a wallet address.
Prosecutors also allege that funds from the AlphaRaccoon account were transferred through a decentralized cryptocurrency exchange and then routed to an unnamed blockchain transaction privacy service.
The DOJ has charged Spagnuolo with three counts: commodity fraud, wire fraud, and money laundering—carrying a maximum potential sentence of 50 years in prison.
In its civil complaint, the CFTC seeks disgorgement, forfeiture of ill-gotten gains, civil monetary penalties, and trading and registration bans.
David Miller, Director of the CFTC’s Division of Enforcement, stated in a press release: “Enforcement authorities are rigorously policing the misuse of material nonpublic information in prediction markets and other markets under the CFTC’s jurisdiction.”
Caption: Source — CFTC
This is the second federal insider trading case in the prediction market space in recent months. In April, the DOJ charged a U.S. soldier with using classified information to place a $400,000 bet on Polymarket regarding the U.S. government’s efforts to apprehend former Venezuelan President Nicolás Maduro.
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