Google Engineer Charged in Polymarket Insider Trading Case

A Google software engineer has been charged with insider trading after using confidential company data to place a series of bets on Polymarket, the crypto-based prediction market platform. Michele Spagnuolo, who goes by the handle AlphaRaccoon on the platform, allegedly accessed nonpublic Google search data and used it to make trades he already knew would pay out. Federal prosecutors say this was not a close call. Spagnuolo is now facing charges of commodities fraud, wire fraud, and money laundering in the Southern District of New York.

What Spagnuolo Actually Did

Polymarket lets users stake money on real-world outcomes, from political events to corporate announcements. One of its recurring markets covers Google’s annual “Year in Search” campaign, in which Google reveals the world’s most popular search terms and people of the year. Spagnuolo had access to an internal Google tool that contained exactly that data, clearly marked “Google Confidential,” months before any public release.

Between October 15 and December 4, 2025, he wagered approximately $2.75 million across markets tied to those search results. The trades were not guesses. He knew the answers before the questions were public, and he bet accordingly. By the time Google published its Year in Search results, Spagnuolo had turned that access into roughly $1.2 million in profit.

The d4vd Bet That Made People Look Twice

The most striking trade in the case involved d4vd, a 20-year-old bedroom pop and R&B artist born David Burke, who rose to prominence after his songs went viral in 2022. The market gave d4vd just a 0.2% chance of becoming Google’s most-searched person of 2025. Most bettors had Pope Leo XIV, Bianca Censori, and Donald Trump as the obvious frontrunners.

Spagnuolo bet on d4vd anyway. He risked $10,647 on that outcome and walked away with nearly $200,000. Across the full set of Google search predictions, he went 22-for-23. A win rate that precise does not happen by accident, and it did not go unnoticed.

The Community Flagged It First

Months before any federal charge, users on prediction market forums had already started talking about AlphaRaccoon. On Discord channels dedicated to Polymarket, traders routinely monitor large and unusual bets and encourage others to follow them. AlphaRaccoon became a name people tracked closely. “AlphaRaccoon has alpha,” wrote one user, using the term for an informational edge on markets. Another simply told followers to check the AlphaRaccoon account before placing bets of their own.

The community spotted the pattern. Federal prosecutors confirmed what the pattern suggested. After cashing out his winnings into cryptocurrency, Spagnuolo removed the AlphaRaccoon name from his Polymarket account. He was arrested in New York and appeared before a federal magistrate judge on May 27, 2026. He did not enter a plea and was released on a $2.25 million bond.

Two Agencies, One Target

The DOJ did not act alone. The Commodity Futures Trading Commission filed a parallel civil complaint against Spagnuolo on the same day, alleging violations of commodities law. The dual-agency approach signals how seriously regulators now treat insider trading on prediction markets. This is not being treated as a grey area.

Google placed Spagnuolo on administrative leave and confirmed full cooperation with investigators. A company spokesperson noted that the internal tool he accessed was available to all employees, but that using such data to place bets violated company policy. “Using such confidential information to place bets is a serious breach of our policies,” the spokesperson said.

A Pattern Emerging Across Polymarket

This case does not stand alone. The DOJ recently charged a U.S. Army soldier with using insider knowledge of a military operation to profit on Polymarket, netting around $400,000. The charges against Spagnuolo now extend that pattern from government operations into the corporate world.

Prediction markets have long operated in a regulatory grey zone, but the argument that insider trading is somehow acceptable on these platforms is getting harder to make. Two federal cases in quick succession show that prosecutors are watching, and that corporate insiders who treat proprietary data as a betting advantage will face the same legal consequences as traditional securities traders. The AlphaRaccoon case may be the clearest example yet of what that enforcement looks like in practice.