A Google data safety engineer has been arrested and charged with commodities fraud, wire fraud, and cash laundering after allegedly utilizing confidential inside firm knowledge to put a collection of bets on Polymarket — the crypto-based prediction market platform — profitable roughly $1.2 million by understanding the outcomes of his wagers earlier than the buying and selling public did.
The US Legal professional’s Workplace for the Southern District of New York unsealed the grievance in opposition to Michele Spagnuolo, 36 — additionally recognized by his Polymarket account alias “AlphaRaccoon” — on Might 27, 2026. Spagnuolo, an Italian citizen residing in Switzerland, was arrested in New York and appeared earlier than US Justice of the Peace Choose Sarah Netburn, the place he was launched on a $2.25 million bond secured by $1 million in money, per the DOJ’s official assertion. He didn’t enter a plea.
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How The Scheme Labored
Based on the unsealed grievance, Spagnuolo had entry to an inside Google software program software — bearing a banner marked “Google Confidential” in purple textual content — that supplied real-time visibility into what customers have been looking out throughout Google’s platform, together with knowledge that fed immediately into Google’s annual “12 months in Search” rankings, per the DOJ submitting.
Starting in Might 2024, Spagnuolo created a Polymarket account and started inserting bets on contracts tied to which people would rank on Google’s most-searched checklist for 2025 — markets Polymarket launched final fall, per the grievance.
Prosecutors allege Spagnuolo transferred roughly $3.8 million in USDC to his Polymarket handle and positioned bets together with a $381.12 “sure” wager that the artist d4vd would rank in Google’s most-searched checklist and appropriately predicted contracts resembling “Will Zohran Mamdani rank within the High 5 most searched” and “Will Squid Sport be the primary searched TV present,” per CNBC’s reporting of the grievance. His success fee throughout these markets was, in response to the grievance, no accident. He knew the solutions earlier than the markets settled.
The CFTC filed a simultaneous civil case in opposition to Spagnuolo searching for financial disgorgement, restitution, and extra penalties, per the grievance. Google confirmed it had positioned Spagnuolo on depart and was cooperating with legislation enforcement — noting that the software he used was technically accessible to all staff, however that utilizing confidential data to put bets represented a severe breach of firm coverage, per an announcement reported by ABC Information.
The Second Case In Thirty Days
The Spagnuolo arrest is the second federal legal case tied to Polymarket insider buying and selling in simply over a month. In April 2026, US Military Particular Forces Grasp Sergeant Gannon Ken Van Dyke was arrested for allegedly utilizing categorised army information of the deliberate seize of Venezuelan President Nicolás Maduro to put bets on Polymarket, reportedly netting greater than $400,000. Van Dyke has pleaded not responsible, per CNN’s reporting.
Polymarket’s chief authorized officer Olivia Chalos mentioned in an announcement that the corporate labored intently with the US Legal professional’s Workplace and the CFTC on the Spagnuolo case — noting that Polymarket is the one prediction platform up to now whose cooperation has led to insider buying and selling prices in the USA, and that the blockchain-based nature of the platform means dangerous actors depart footprints.
This growth marks a important and accelerating second for the nascent prediction market sector. Two federal insider buying and selling arrests in thirty days — one involving army categorised data, the opposite company search knowledge — arriving concurrently with an lively congressional investigation into Polymarket and Kalshi, confirms that the authorized perimeter round prediction markets is closing quick. The transparency of blockchain buying and selling, as soon as seen primarily as a characteristic for customers, is now functioning as a forensic path for federal prosecutors.
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