A Google information security engineer was arrested Wednesday on federal charges of using confidential company data to place lucrative bets on a cryptocurrency-based prediction market, in what prosecutors described as a brazen case of insider trading.
Michele Spagnuolo, 36, an Italian national living in Switzerland, allegedly accessed Google’s internal search analytics and wagered approximately $2.75 million on Polymarket, a platform where users bet on real-world events, according to a criminal complaint filed in Federal District Court in Manhattan, CBNC reported.
Mr. Spagnuolo made roughly $1.2 million by correctly predicting results from Google’s annual “Year in Search” report, prosecutors said. He placed bets on which people would be most searched by Google users in 2025, including a wager that the indie pop artist d4vd would top the list.
The complaint alleges that Mr. Spagnuolo, using the username “AlphaRaccoon,” placed his bets just hours after accessing sensitive internal Google data that revealed search trends before they were made public. When Google released its Year in Search 2025 results around Dec. 4, 2025, his account collected the winnings.
“A Google employee allegedly used confidential information to make more than $1.2 million through insider trading on a prediction market,” Damian Williams, the U.S. attorney for the Southern District of New York, said in a statement Wednesday.
Mr. Spagnuolo appeared before a federal magistrate judge in New York on Wednesday and was released on a $2.25 million bond. He has not entered a plea.
Serious federal charges
He faces charges of commodities fraud, wire fraud and money laundering — crimes that together carry a maximum sentence of 50 years in prison if he is convicted on all counts.
The Commodity Futures Trading Commission also filed a parallel civil lawsuit against Mr. Spagnuolo, accusing him of violating insider trading laws. The commission’s complaint alleges that he “misappropriated the material Confidential Information by knowingly or recklessly using it to trade” in breach of his duties to Google.
Polymarket, which operates on blockchain technology, allows users to bet on the outcomes of news events, elections and cultural phenomena. The platform has grown rapidly in recent years, drawing scrutiny from regulators concerned about potential manipulation and insider trading.
Second such prosecution
The case represents the second federal criminal prosecution involving profitable trades on a prediction market platform, according to prosecutors. It comes as federal authorities have intensified their focus on emerging financial technologies and the potential for fraud in largely unregulated markets.
Mr. Spagnuolo’s arrest highlights the challenges technology companies face in protecting proprietary information, particularly data that could be exploited for financial gain. Google’s Year in Search report, released annually, has become a closely watched cultural barometer that generates significant media attention.
The case will proceed through both criminal prosecution by the U.S. attorney’s office and the separate civil enforcement action by the C.F.T.C.
