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Google Engineer “AlphaRaccoon” Charged in Insider Trading on Polymarket

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Michele Spagnuolo, a Google engineer, faces insider trading charges for allegedly using confidential data to make profitable bets.
Federal prosecutors lead the investigation, accusing Spagnuolo of accessing internal Google systems to inform his trades on Polymarket.
The FBI plays a key role in the case, examining Spagnuolo’s attempts to conceal his crypto profits through token swaps and transfer services.

A Google engineer has been accused of insider trading by federal prosecutors. They reportedly used confidential Google search data to make bets on Polymarket, a cryptocurrency-based prediction platform.

Michele Spagnuolo, who goes by the online name “AlphaRaccoon,” was arrested in New York. He’s accused of illegally using confidential data about Google search trends to make successful bets on what would be included in Google’s 2025 Year in Search report.

Court documents show that Spagnuolo is accused of making over $1.2 million by betting on prediction markets. He reportedly gained access to confidential Google data before it was publicly released and used this information to trade on Polymarket, giving him an unfair advantage.

Authorities claim Spagnuolo then tried to hide the money earned from cryptocurrency by exchanging it for different tokens and using services designed to keep transactions private. This case is drawing more attention to the fast-growing world of prediction markets, where officials are closely watching how people try to profit from trading contracts based on crypto and real-world events.

FBI filing details insider trading allegations

As a researcher, I’ve been examining Google’s ‘Year in Search’ data, and it’s become clear this information is considered extremely sensitive by the company. Federal investigators have characterized it as highly confidential commercial data – essentially, releasing it could significantly impact things like advertising revenue, media coverage, and overall marketing strategies. Internally, access is very limited, and the data is clearly marked as ‘Google Confidential’ within their systems, demonstrating just how carefully they guard it.

Prosecutors claim Michele Spagnuolo repeatedly checked search rankings in late 2025 and then made substantial bets on Polymarket, predicting the results of those searches. They say some of these bets were on outcomes most people considered very improbable.

The lawsuit includes an example involving musician d4vd. Prosecutors claim that on Polymarket, traders believed d4vd had almost no chance of being the most searched person of the year on Google. However, investigators say internal Google data already showed d4vd as the top searcher before this information was public, which allowed Spagnuolo to make winning bets before the official announcement.

The complaint detailed a trail of blockchain transactions connected to digital wallets reportedly used by Spagnuolo. Investigators found that money passed through various accounts on Polymarket, cryptocurrency exchange services, and payment platforms associated with him. Prosecutors believe this was done to hide where the money originally came from.

Prosecutors have accused Spagnuolo of fraud related to commodity trading, wire fraud, and laundering money. This case is part of a larger wave of investigations into prediction markets and trading events using cryptocurrency.

Polymarket and regulators increase pressure

Following the announcement of the charges, CFTC Chairman Mike Selig stated that regulators will keep pursuing and penalizing wrongdoing in both prediction markets and cryptocurrency trading.

Selig stated on X that anyone who commits fraud, engages in insider trading, or manipulates the market will be prosecuted to the fullest extent of the law.

I’ve said it before, and I’ll say it again: if you engage in fraud, insider trading, or market manipulation, you’ll be prosecuted to the fullest extent of the law. Today, the CFTC worked alongside the Southern District of New York to bring charges against someone for insider trading related to event contracts. Our Division of…

— Mike Selig (@ChairmanSelig) May 28, 2026

Polymarket highlighted its work with investigators, explaining that the recent case demonstrates the platform’s commitment to spotting and reporting unusual trading. In a statement, the company claimed it’s become a leader in enforcement, as both arrests made in this industry so far have stemmed from tips provided by Polymarket.

This legal action follows growing oversight of prediction markets and betting contracts involving cryptocurrency. In Washington, officials are currently discussing how to regulate platforms where people bet on outcomes in areas like politics, sports, and finance.

As an analyst, I’m watching this case closely. It could really set a precedent for how the US government handles insider trading and market manipulation within the quickly expanding world of blockchain-based prediction markets. These markets have seen huge growth in the last year, and the outcome here will likely shape future regulation.

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2026-05-28 10:14