A Google software engineer was charged on May 28, 2026 with using confidential company data to pocket $1.2 million on prediction market Polymarket - the first criminal insider trading case targeting a corporate insider for activity on a crypto prediction platform.
The Justice Department unsealed charges against Michele Spagnuolo, accusing him of accessing unreleased internal Google data to place 25 bets totaling $2.7 million on markets predicting Google's most-searched individuals in 2025. Spagnuolo, who operated under the Polymarket handle "AlphaRaccoon," allegedly traded with near-perfect accuracy and profited on "outcomes that the market treated as unlikely" when Google published its Year in Search results in December 2025.
The DOJ charged Spagnuolo with commodities fraud, wire fraud, and money laundering. He faces a maximum of 50 years in prison. The Commodity Futures Trading Commission filed a parallel civil complaint the same day, seeking restitution, disgorgement, civil monetary penalties, and permanent trading and registration bans.
The alleged cover-up began in December 2025, when communities on Discord and X flagged AlphaRaccoon as a possible insider. According to court documents, the account was subsequently renamed to a wallet address and the funds were moved through a decentralized crypto swapping service and an unnamed privacy-protecting transfer service.
Manhattan US 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." CFTC enforcement director David Miller said his division "is a cop on the beat in policing the illegal use of inside information in the prediction markets."
The case lands in a charged regulatory moment. In April 2026, the DOJ charged a US soldier for using classified information to place bets on Polymarket. The week of the Spagnuolo charges, Congress launched a probe into both Polymarket and Kalshi, questioning the platforms' responses to insider trading incidents and whether government officials had used privileged knowledge to profit.
The twin federal actions carry structural significance beyond one defendant. Prediction markets have long existed in a regulatory gray zone, with operators and advocates arguing the platforms functioned outside traditional financial market rules. The simultaneous DOJ criminal filing and CFTC civil complaint treat Polymarket contracts as instruments subject to the same insider trading law governing equities and commodities. That position, applied by two agencies in a coordinated action, sets a marker the industry will have to navigate regardless of how the Spagnuolo case concludes.
Spagnuolo is a resident of Switzerland. No attorney information for him was listed in publicly available charging documents at the time of publication.