Google employee accused of insider trading on Polymarket
An Italian Google software engineer has become the subject of an investigation in the United States, after being accused of using confidential company information to gain an advantage on Polymarket’s prediction markets.
According to the complaint filed by the US federal authorities, Michele Spagnuolo, a 36-year-old Italian national residing in Switzerland, is alleged to have generated profits in excess of $1.2 million by trading on the blockchain platform via an account identified by the pseudonym “AlphaRaccoon”.
This case represents one of the most significant developments in the growing regulatory debate surrounding prediction markets, which are platforms that allow users to trade contracts based on the outcome of future events. This new digital frontier lies at the intersection of blockchain technology, betting, and financial instruments, and is attracting the attention of regulatory authorities.
Allegations focus on Google internal information used to trade on Polymarket
According to the US Attorney’s Office for the Southern District of New York, Spagnuolo is alleged to have exploited material non-public information obtained in the course of his professional role at Google.
The prosecution alleges that the employee had access to confidential data relating to the ‘Year in Search 2025’ list, the annual report in which Google publishes the major user search trends.
Prior to the official release of the results, the engineer allegedly used this information to purchase event contracts on Polymarket linked to the rankings of the year’s most popular searches.
Between October and December 2025, according to investigators, the AlphaRaccoon account carried out trades worth approximately $2.75 million across various markets linked to Google’s report, making a total profit of over $1.2 million.
According to US authorities, having access to internal data in advance allowed the trader to obtain crucial information before other market participants.
Stablecoins, blockchain and investigations into financial transactions
Another key aspect of the investigation concerns the management of funds used on the platform.
According to the account set out in the court documents, Spagnuolo is alleged to have transferred large amounts of stablecoins to Polymarket to fund his trading activity.
Investigators also claim that, after obtaining the disputed gains, he adopted strategies to make it more difficult to trace the funds.
The US Department of Justice has brought charges including violation of the Commodity Exchange Act, wire fraud and money laundering.
Authorities have stressed that the charges are allegations and that the suspect is presumed innocent until a court reaches a final determination.
CFTC civil case against the Google employee
In parallel with the criminal proceedings, the Commodity Futures Trading Commission has also brought a civil action against Michele Spagnuolo.
According to the US federal authority that oversees the derivatives markets, the case would represent a breach of the rules against the misuse of privileged information in the markets under its jurisdiction.
The CFTC has sought various remedies, including the disgorgement of alleged illicit gains, financial penalties, restrictions on trading activities and other measures provided for by law.
The regulator’s intervention confirms the authorities’ growing interest in the prediction markets sector, particularly when these instruments take on characteristics similar to those of traditional financial markets.
Google’s response to the investigation
Google has confirmed through a spokesperson that it is cooperating with the US authorities. The group has emphasised that the use of confidential company material for personal purposes constitutes a breach of its internal policies.
The company explained that the employee had access to certain confidential information for work-related reasons, but that this data could not be used for personal purposes or to gain financial benefit.
The technology group has suspended the employee in question and stated that it will take further action depending on how the case progresses.
Polymarket and the challenge of regulation
The case comes at a crucial juncture for the future of prediction markets.
Polymarket allows users to buy and sell positions on the outcome of real-world events, creating markets where the price reflects the probability the community assigns to a particular outcome.
The model has fuelled rapid growth in the sector, but it has also raised questions about oversight and the prevention of abuse.
Unlike traditional betting, prediction markets can involve events linked to information held by companies, governments or private organisations. This creates new challenges in managing sensitive data and the possibility that some users may trade with knowledge not available to the public.
A precedent for the future of digital betting
The AlphaRaccoon case could set a precedent for the relationship between insider trading, blockchain and new forms of digital betting.
Technological developments are increasingly blurring the lines between betting platforms, decentralised financial markets and collective forecasting tools.
For regulators and operators, the challenge will be to establish rules capable of safeguarding market integrity without stifling innovation.
The proceedings against Michele Spagnuolo will therefore be closely watched not only by the technology sector, but also by the wider iGaming and fintech industries, which is increasingly involved in the global debate on the regulation of new digital markets.
This article was originally published on the Italian SiGMA News page on 1 June 2026.
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