Google engineer charged in alleged $1.2mn Polymarket insider trading scheme
A Google engineer has been arrested for allegedly using his employer's secret search trend data to win $1.2mn on Polymarket as landmark case tests whether prediction markets are subject to the same rules as Wall Street.
Betting on Polymarket is supposed to be a fun, low-intensity gamble whereby you buy 'yes' or 'no' shares for the outcome of a real-world event and hope to correctly predict how it resolves — at which point your winning share pays out $1 and your losing one pays nothing.
That is, unless you are an employee at Google and federal prosecutors allege you already know the answers — in which case it could amount to insider trading, one of the most aggressively prosecuted white-collar offences on the books that can carry a maximum prison sentence of 20 years.
According to the US Attorney for the Southern District of New York, Michele Spagnuolo, a staff software engineer at Google, allegedly used his employer's most confidential annual trend data compilation to pocket more than $1.2 million (€1.1mn) on Polymarket. His alias was known as “AlphaRaccoon.”
Spagnuolo has now been charged with commodities fraud, wire fraud and money laundering by federal prosecutors in New York.
The Spagnuolo case is the second high-profile prosecution for insider trading on a prediction market in just over a month, part of a largely unexplored legal frontier as prosecutors grapple with how existing fraud and commodities law applies to platforms like Polymarket, which operate nothing like a traditional stock exchange.
How Google's 'Year in Search' became a trading tip
Every December, Google publishes its "Year in Search" — a splashy, carefully choreographed reveal of the year's top trending searches. It drives traffic, generates significant media coverage and, as the filing notes, serves as a "high-profile vehicle" through which Google demonstrates its reach to advertisers.
The whole point, commercially speaking, is the surprise. Google guards the underlying data closely and even internally, access is restricted to a limited number of employees.
Spagnuolo, who has worked at Google since around 2014, allegedly had access to an internal software tool bearing a banner reading "Google Confidential" that gave him sight of the Year in Search results before anyone outside the company did.
Enter AlphaRaccoon
On the prediction market platform Polymarket, users can bet on the outcome of real-world events such as elections, sports results, and cultural moments using cryptocurrency. In October 2025, Polymarket began offering markets on who would be Google's most-searched person of the year.
Around the same time, a Polymarket account called "AlphaRaccoon" started placing bets.
Between October and December 2025, FBI Special Agent Brandon Racz alleges, Spagnuolo accessed Google's confidential Year in Search data and then, sometimes within hours, placed wagers on Polymarket that reflected exactly what he had seen.
On or about 15 October 2025, Spagnuolo allegedly accessed the internal tool. The following day, the AlphaRaccoon account wagered approximately $403 (€373) on Kendrick Lamar being the number one searched person of 2025 at the implied odds of just 3% and roughly $10,807 (€10,022) against Pope Leo XIV taking the top spot.
He allegedly knew this, according to prosecutors, because the internal data already told him so.
Betting against the crowd
What makes the alleged scheme particularly striking is how it worked in practice. Because Spagnuolo allegedly knew who would not top the rankings, he could bet heavily against the crowd's favourites and collected winnings when popular picks failed to materialise.
The AlphaRaccoon account wagered approximately $937,688 (€869,083) on the "no" side of the question of whether Bianca Censori would be the number one searched person at a time when the market put her odds at around 85%.
It bet roughly $613,587 (€568,628) against Pope Leo XIV at 56% implied probability, and approximately $509,149 (€471,741) against Donald Trump at around 90%.
In total, across roughly 25 bets on Year in Search outcomes, AlphaRaccoon risked approximately $2.75mn (€2.55mn).
When Google published its results on 4 December 2025, confirming its global top five trending people as d4vd, Kendrick Lamar, Jimmy Kimmel, Tyler Robinson and Pope Leo XIV, the account walked away with approximately $1.2mn (€1.11m) in profit.
The cover-up
Once the markets resolved, roughly $3.9mn (€3.6mn) in USDC.e — a cryptocurrency tied to the value of the US dollar — was released to the AlphaRaccoon account. On 10 December, the account transferred approximately $5mn (€4.6mn) to a linked cryptocurrency wallet.
Polymarket used USDC.e as its main payment currency for trading and settlements on the Polygon blockchain network.
From there, according to the complaint, the funds passed through at least two cryptocurrency swaps before being moved into a service that prosecutors say was designed to make the transactions harder to trace.
Meanwhile, online communities on Discord and X had already begun speculating that AlphaRaccoon was a Google insider. Shortly afterwards, the username was quietly removed from the account, reverting it to an anonymous alphanumeric string.
The FBI traced the wallet anyway.
Prosecutors allege cryptocurrency records linked the AlphaRaccoon account to a wallet that had sent approximately $149,980 (€138,916) to a payment processor account registered in the name of Michele Spagnuolo using an Italian government identification card.
The charges
Spagnuolo faces three charges. The first is commodities fraud, based on allegations that he used material nonpublic information to execute trades on Polymarket, which prosecutors are treating as a platform offering commodity-linked contracts.
The second is wire fraud, relating to the alleged misuse of Google's confidential commercial information for personal gain. The third is money laundering, tied to prosecutors' claims that he took steps after December 2025 to conceal the source and ownership of the proceeds.
The complaint was sworn before US Magistrate Judge Sarah Netburn in the Southern District of New York.
The case follows that of US Army Special Forces Master Sergeant Gannon Ken Van Dyke, who was charged in April with allegedly using classified information about a US military operation targeting Nicolás Maduro to place winning bets on Polymarket. Prosecutors say Van Dyke turned roughly $33,000 in wagers into more than $400,000 in profit. He has pleaded not guilty.
