A Google software engineer faces federal charges over alleged Polymarket bets tied to confidential search data, intensifying scrutiny of prediction markets.
A Google software engineer is facing federal charges after prosecutors accused him of using confidential company information to make more than $1.2 million in profits on Polymarket, the prediction-market platform that has grown rapidly as traders wager on real-world outcomes.
Michele Spagnuolo, an Italian citizen who lives in Switzerland, was charged with commodities fraud, wire fraud and money laundering, according to court papers released by the Justice Department and reported by CBS News. The Commodity Futures Trading Commission also filed a civil lawsuit against him on similar grounds.
The case puts fresh pressure on Polymarket and the broader prediction-market business at a moment when questions about insider trading are becoming harder for the sector to dismiss. CBS News reported that this is the second insider trading prosecution involving a Polymarket user in recent months.
Prosecutors allege that Spagnuolo used an internal Google tool late last year to view data on the company’s top-trending searches of 2025 before that information was released publicly in Google’s annual Year in Search report. He then allegedly placed millions of dollars in bets on Polymarket markets tied to whether various celebrities would appear among the most searched people on Google that year.
One of the bets involved the singer D4vd, who became a major search subject in 2025 after a 15-year-old’s dismembered body was found in the trunk of a car registered to him, according to the CBS report. Prosecutors accused Spagnuolo, using the Polymarket username “AlphaRaccoon,” of correctly betting that D4vd would rank among Google’s most widely searched people at a time when the market viewed that outcome as unlikely.
Days after Google publicly released the Year in Search data, Spagnuolo’s Polymarket account allegedly transferred millions of dollars in cryptocurrency to a crypto wallet, CBS reported, citing the court papers.
The charges were unsealed Wednesday. Spagnuolo was arrested in New York and appeared before a magistrate judge, who released him on $2.25 million bond, the U.S. Attorney’s Office for the Southern District of New York confirmed to CBS News. CBS said it had contacted Spagnuolo and his attorney for comment.
Google said the employee has been placed on leave and that the company is cooperating with law enforcement. “The employee accessed our marketing material using a tool available to all employees, but using such confidential information to place bets is a serious breach of our policies,” a Google spokesperson said.
Polymarket said on X that it had flagged the trader, and a spokesperson told CBS the company worked closely with federal authorities. The company also said insider trading is barred on its platform and that it refers illegal activity to law enforcement.
“Blockchain trading is transparent, traceable, and bad actors leave footprints,” the Polymarket spokesperson said. “We are committed to maintaining accurate, fair, and transparent markets as well as enforcing our rules and working with our regulators and law enforcement.”
The allegations follow another case in which a U.S. special forces soldier was arrested after allegedly winning more than $400,000 by betting on a raid to capture former Venezuelan leader Nicolás Maduro before news of the operation became public. The soldier pleaded not guilty.
For Polymarket, the immediate issue is not only the outcome of Spagnuolo’s case, but whether federal prosecutors and regulators treat these incidents as isolated misconduct or as signs of a broader enforcement problem for prediction markets built around fast-moving, nonpublic information.
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