Federal Authorities File Insider Trading Charges Against Google Engineer Over Polymarket Wagers
Federal prosecutors and the CFTC claim Michele Spagnuolo, a software engineer at Google, made $1.2 million in profits on Polymarket by exploiting confidential company data obtained during employment.
Federal prosecutors have brought charges against an employee of Google who allegedly leveraged company information to place wagers on Polymarket, generating profits of $1.2 million.
On Wednesday, the Justice Department announced it had unsealed criminal charges targeting Michele Spagnuolo, a software engineer employed by Google, alleging he obtained unreleased confidential data from within the company and wagered $2.7 million across 25 separate bets on prediction markets concerning the most frequently searched personalities on Google during 2025.
According to prosecutors, Spagnuolo controlled the Polymarket user account known as "AlphaRaccoon", which generated $1.2 million in profits by betting on "outcomes that the market treated as unlikely" prior to Google's publication of data regarding the most searched individuals in December.
On the same day, the Commodity Futures Trading Commission submitted a parallel civil complaint targeting Spagnuolo, leveling comparable accusations of trading on inside information.
The prediction markets industry is experiencing heightened regulatory attention regarding insider trading practices, with congressional lawmakers initiating an investigation into both Polymarket and Kalshi last Friday, examining how the platforms address insider trading violations, amid concerns that government employees may be leveraging privileged information to place profitable wagers.
In a public statement, Manhattan US District Attorney Jay Clayton emphasized that these charges "reinforce a decades-old message: Corporate insiders cannot use confidential business information to turn a profit in our markets."
AlphaRaccoon account allegedly changed name
The court filings reveal that online communities on platforms including Discord and X began speculating in December that AlphaRaccoon might be someone with insider access at Google. Shortly thereafter, the account username was allegedly modified to display a wallet address instead.
Federal prosecutors allege that assets held in the AlphaRaccoon account were subsequently transferred to a decentralized cryptocurrency exchange service and to an unidentified transfer platform that provides anonymity features for blockchain-based transactions.
Spagnuolo faces charges from the Justice Department including commodities fraud, wire fraud and money laundering, with potential sentencing of up to 50 years imprisonment if convicted.
The CFTC's civil complaint requests restitution, disgorgement, civil monetary penalties and trading and registration bans.
In a statement, CFTC director of enforcement, David Miller, emphasized that "the division is a cop on the beat in policing the illegal use of inside information in the prediction markets and other markets within the CFTC's jurisdiction."
"We will continue to take action to protect markets from insider trading and other forms of fraud, abuse and manipulation," Miller added.
The charges arrive several months after the Justice Department filed criminal charges against a member of the US military in April for allegedly utilizing classified intelligence to wager on prediction markets concerning the US capture of former Venezuelan president Nicolás Maduro.