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A Google software engineer was charged with insider trading on Polymarket, where he allegedly made more than $1 million betting on one of last year’s most popular internet searches.
Michele Spagnuolo was charged in a complaint unsealed Wednesday in federal court in New York. Spagnuolo, 36, appeared before a federal magistrate and was released on a $2.25 million bond.
Mike Ferrara, a lawyer for Spagnuolo, declined to comment on the charges.
The case comes amid growing concern about insider trading on prediction markets. The charges against Spagnuolo come just a little more than a month after a US Army Special Forces master sergeant was charged with using classified information about the operation to capture then-Venezuelan President Nicolas Maduro to make $400,000 betting on Polymarket.
According to the complaint, Spagnuolo, an Italian citizen who joined Google in 2014, had access to company data that tracked user searches when he bet that Google’s most-searched person in 2025 would be the singer D4vd. Last month, D4vd, whose real name is David Anthony Burke, was charged with murdering a 14-year-old girl. He has pleaded not guilty.
At the time, Polymarket assigned a “near-zero probability” that D4vd would be the top-ranked search over figures like Pope Leo XIV and Kendrick Lamar, prosecutors said. When D4vd was publicly announced as the top-searched person in December, Spagnuolo allegedly made around $1.2 million.
“We’re working with law enforcement on their investigation,” a Google spokesperson said in a statement. “The employee accessed our marketing material using a tool available to all employees, but using such confidential information to place bets is a serious breach of our policies. We’ve placed the employee on leave and will take the appropriate action.”
Prosecutors said Spagnuolo, who traded on Polymarket under the username “AlphaRaccoon,” also sought to cover up his bets with a service that adds privacy protection to cryptocurrency transactions, according to the complaint. His account vanished from the market after users on X and Discord speculated that it had been used by a Google insider to trade ahead of the search results announcement, prosecutors said.|
The Commodity Futures Trading Commission filed a parallel civil lawsuit against Spagnuolo late Wednesday, seeking civil penalties and a return of illicit profits, among other measures.
The agency said one of the accounts opened up in his name used his Italian government ID. When online reports in December 2025 started raising suspicions about AlphaRaccoon’s Polymarket trades, the CFTC said, Spagnuolo changed his handle.
Gannon Ken Van Dyke, the Army sergeant charged with insider trading on the Maduro ouster, has pleaded not guilty.
Polymarket has said it is bolstering efforts against insider trading as the company aims to expand its US presence. In March, the company updated its rules to clarify that certain kinds of wagers are prohibited, such as acting on stolen confidential information or betting if customers are in a position to influence the outcome of an event.
Polymarket is partnering with blockchain analytics firm Chainalysis Inc. on insider-trading detection tools. The firm is also working with Palantir and TWG AI to identify and report suspicious activity on sports wagers on its US exchange.
Polymarket worked with authorities on the case of Van Dyke and said they flagged another trader who was arrested on Wednesday in New York.
“With 2 out of 2 arrests in this industry resulting from our criminal referrals, Polymarket has emerged as the enforcement leader,” the company said in a post on X.
Polymarket’s main business operates offshore, outside the oversight of US regulators, and it sometimes allows customers to register without identity checks. While Polymarket’s terms of service bar US customers, traders have spoken publicly about circumventing the company’s restrictions by using a virtual private network.
The case is is US v. Spagnuolo, US District Court, Southern District of New York.
–With assistance from Ava Benny-Morrison, Nathaniel Popper and Denitsa Tsekova.
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