A Google information security engineer has been arrested and charged with commodities fraud, wire fraud, and money laundering after allegedly using confidential internal company data to place a series of bets on Polymarket — the crypto-based prediction market platform — winning approximately $1.2 million by knowing the outcomes of his wagers before the trading public did.
The US Attorney’s Office for the Southern District of New York unsealed the complaint against Michele Spagnuolo, 36 — also known by his Polymarket account alias “AlphaRaccoon” — on May 27, 2026. Spagnuolo, an Italian citizen residing in Switzerland, was arrested in New York and appeared before US Magistrate Judge Sarah Netburn, where he was released on a $2.25 million bond secured by $1 million in cash, per the DOJ’s official statement. He did not enter a plea.
How The Scheme Worked
According to the unsealed complaint, Spagnuolo had access to an internal Google software tool — bearing a banner marked “Google Confidential” in red text — that provided real-time visibility into what users were searching across Google’s platform, including data that fed directly into Google’s annual “Year in Search” rankings, per the DOJ filing.
Beginning in May 2024, Spagnuolo created a Polymarket account and began placing bets on contracts tied to which individuals would rank on Google’s most-searched list for 2025 — markets Polymarket launched last fall, per the complaint.
Prosecutors allege Spagnuolo transferred approximately $3.8 million in USDC to his Polymarket address and placed bets including a $381.12 “yes” wager that the artist d4vd would rank in Google’s most-searched list and correctly predicted contracts such as “Will Zohran Mamdani rank in the Top 5 most searched” and “Will Squid Game be the number one searched TV show,” per CNBC’s reporting of the complaint. His success rate across these markets was, according to the complaint, no accident. He knew the answers before the markets settled.
The CFTC filed a simultaneous civil case against Spagnuolo seeking monetary disgorgement, restitution, and additional penalties, per the complaint. Google confirmed it had placed Spagnuolo on leave and was cooperating with law enforcement — noting that the tool he used was technically available to all employees, but that using confidential information to place bets represented a serious breach of company policy, per a statement reported by ABC News.
The Second Case In Thirty Days
The Spagnuolo arrest is the second federal criminal case tied to Polymarket insider trading in just over a month. In April 2026, US Army Special Forces Master Sergeant Gannon Ken Van Dyke was arrested for allegedly using classified military knowledge of the planned capture of Venezuelan President Nicolás Maduro to place bets on Polymarket, reportedly netting more than $400,000. Van Dyke has pleaded not guilty, per CNN’s reporting.
Polymarket’s chief legal officer Olivia Chalos said in a statement that the company worked closely with the US Attorney’s Office and the CFTC on the Spagnuolo case — noting that Polymarket is the only prediction platform to date whose cooperation has led to insider trading charges in the United States, and that the blockchain-based nature of the platform means bad actors leave footprints.
This development marks a critical and accelerating moment for the nascent prediction market sector. Two federal insider trading arrests in thirty days — one involving military classified information, the other corporate search data — arriving simultaneously with an active congressional investigation into Polymarket and Kalshi, confirms that the legal perimeter around prediction markets is closing fast. The transparency of blockchain trading, once seen primarily as a feature for users, is now functioning as a forensic trail for federal prosecutors.
Cover image from Grok, ETHUSD chart from Tradingview
