Google Engineer Arrested After Winning $1.2 Million From Polymarket Trades

A Google software engineer is facing federal criminal charges after prosecutors say he used confidential company data to place a series of bets on the prediction market platform Polymarket, walking away with roughly $1.2 million in profit.  

Michele Spagnuolo, 36, an Italian citizen living in Switzerland, was arrested in New York on Wednesday and charged with commodities fraud, wire fraud, and money laundering, in a complaint unsealed in the Southern District of New York. 

Insider trading has been a major topic recently surrounding prediction market apps.

According to the complaint, Spagnuolo placed 25 bets totaling more than $2.7 million on Polymarket between approximately October and December of last year. The bets centered on Google's Year in Search 2025, a marketing campaign in which the company publicly reveals its most popular search queries of the year.  

Prosecutors allege Spagnuolo accessed confidential internal search-trend data through a tool available to all Google employees to determine likely outcomes before they were publicly announced. 

Among his alleged wagers, he bet that singer D4vd would be the most-searched person of 2025, a pick that Polymarket traders at the time considered a near-zero probability. He also bet against Bianca Censori and Donald Trump holding the top spot. 

After Google publicly released its Year in Search results last year, Spagnuolo's Polymarket account, operating under the name AlphaRaccoon, settled into profit. He was identified in part because platform observers had already flagged the AlphaRaccoon account in December for statistically improbable accuracy across the search-related markets. 

Spagnuolo appeared before a federal magistrate on Wednesday without entering a plea and was released on a $2.25 million bond. Google confirmed he has been placed on administrative leave. 

Polymarket founder dismisses insider trading fears

The Spagnuolo arrest is the second high-profile federal case tied to Polymarket trades in a matter of weeks. It arrives at a particularly complicated moment for the platform's leadership.  

Speaking at Harvard on Monday, Polymarket founder Shayne Coplan told an audience that concerns about insider trading and game-fixing on prediction markets are groundless. He described them as disproportionate to how the platforms actually function. 

Coplan's primary argument against sports-related manipulation rested on market size. A typical basketball contract on Polymarket carries around $200,000 in total bets, which he characterized as too small to make deliberately losing a game financially rational.  

Coplan acknowledged but quickly downplayed the earlier Polymarket case involving a US Army soldier who allegedly used classified intelligence about the American military operation capturing former Venezuelan President Nicolás Maduro to earn over $400,000 on the platform. The Department of Justice has since charged the soldier in that case, with the soldier pleading not guilty. 

House Oversight Chairman James Comer has opened a congressional investigation into insider trading on both platforms, and Spain's gambling regulator this week moved to block Polymarket and Kalshi for operating without licenses and failing to verify user identities.