Google engineer arrested over $1.2 million Polymarket insider trading scheme
The 36-year-old Zurich-based security engineer faces charges of commodities fraud, wire fraud and money laundering, marking the first arrest of a tech worker for alleged activity on prediction markets.
Michele Spagnuolo, a 36-year-old Google security engineer based in Zurich, was arrested in New York on charges of commodities fraud, wire fraud and money laundering. Federal prosecutors allege that between October and December 2025, Spagnuolo exploited confidential internal data regarding Google Search traffic to place trades on the prediction market platform Polymarket, securing over $1 million in profits.
The unsealed complaint details how Spagnuolo, an Italian citizen who has worked at Google since 2014, accessed commercially valuable internal data to gain an unfair advantage. In a significant instance, he netted $1.2 million by correctly predicting that singer D4vd would be Google’s most-searched person of the year in 2025. This outcome had been assigned a near-zero probability by the market, yet Spagnuolo knew the result before the trading public due to his access to Google’s internal metrics.
FBI agent Brandon Racz noted in the complaint that Spagnuolo took deliberate steps to conceal the source and ownership of his proceeds after winning. The scheme also included wagers against other high-profile figures, such as Pope Leo XIV and Kendrick Lamar. Polymarket watchers had long speculated that the account username 'AlphaRaccoon' belonged to a Google insider, given the improbable odds of the predictions made.
This case marks the first arrest of a tech worker for alleged activity on prediction markets, distinguishing it from earlier incidents where employees were merely fired. It follows the April arrest of a US Army special forces officer for bets related to the capture of former Venezuelan leader Nicolás Nicolás Maduro. Both cases have been prosecuted by the Southern District of New York.
Google has placed Spagnuolo on leave, citing a serious breach of policy. A spokesperson stated that while the employee accessed marketing material using a tool available to all staff, using such confidential information for betting was a violation. Polymarket confirmed it cooperated with the US Attorney’s Office and the Commodity Futures Trading Commission (CFTC), noting that blockchain trading is transparent and traceable.
The arrest has intensified regulatory scrutiny of the prediction market industry. House Committee on Oversight and Government Reform chairman James Comer has launched an investigation into insider trading on these platforms, requesting information from Polymarket regarding customer vetting processes. Meanwhile, CFTC chairman Michael Selig has stated the agency is utilising artificial intelligence tools to detect market manipulation and insider trading.
Polymarket operates two versions of its platform: a smaller legal US platform and a larger offshore version using cryptocurrency, which is technically blocked in the US. The company stated it referred the matter to authorities and is committed to maintaining fair and transparent markets. Spagnuolo’s arrest highlights the growing intersection of big tech data access and financial regulation in the emerging prediction market sector.
