A Google software engineer has been charged by U.S. authorities for allegedly using confidential company information to place bets on the prediction market Polymarket. Michele Spagnuolo is accused of making $1.2 million in profit from 25 bets related to Google’s internal data on its most-searched individuals, according to charges from the Justice Department and the Commodity Futures Trading Commission.
U.S. authorities have charged a Google employee with allegedly using internal company information to place bets on Polymarket and profit $1.2 million. The Justice Department said it unsealed charges against software engineer Michele Spagnuolo, accusing him of accessing unreleased information to place 25 bets worth $2.7 million.
Prosecutors alleged Spagnuolo owned the Polymarket account “AlphaRaccoon,” which profited from outcomes deemed unlikely before Google published its search data. The Commodity Futures Trading Commission filed a twin complaint against Spagnuolo, making similar allegations of insider trading.
Prediction markets are facing growing scrutiny over insider trading, with Congress launching a probe into Polymarket and Kalshi. Lawmakers are questioning the companies’ response to such incidents, concerned that government officials may use insider knowledge to make bets.
Manhattan U.S. District Attorney Jay Clayton said the charges “reinforce a decades-old message: Corporate insiders cannot use confidential business information to turn a profit in our markets.” According to court documents, online communities began discussing the possibility that AlphaRaccoon was a Google insider in December.
The username was allegedly changed to a wallet address soon after these discussions. Prosecutors also alleged funds from the account were sent to a decentralized crypto swapping service and a privacy-focused transfer service.
The Justice Department charged Spagnuolo with commodities fraud, wire fraud, and money laundering, which could carry a maximum 50-year sentence. The CFTC seeks restitution, disgorgement, civil penalties, and trading bans in its complaint.
CFTC director of enforcement David Miller stated the division is “a cop on the beat in policing the illegal use of inside information.” He added that they will continue action to protect markets from fraud and manipulation. This case follows an April charge where the Justice Department accused a U.S. soldier of using classified information to bet on a geopolitical event.
