Federal prosecutors charged a Google engineer with insider trading after investigators uncovered an alleged scheme involving confidential search data and bets placed on crypto-native prediction platform Polymarket.
Authorities arrested Michele Spagnuolo, known online as “AlphaRaccoon,” in New York, accusing him of using nonpublic Google search trend information to make profitable wagers before the company released its 2025 Year in Search rankings.
According to court filings in the Southern District of New York, Spagnuolo allegedly earned more than $1.2 million by placing targeted prediction-market bets using data unavailable to the public. Prosecutors said he accessed internal Google systems ahead of the rankings release and used the information to trade on Polymarket before the market could react.
Investigators also alleged that Spagnuolo later attempted to conceal the crypto profits through token swaps and privacy-focused transfer services. The case adds fresh scrutiny to the rapidly growing prediction-market sector, where regulators and prosecutors are increasingly examining how traders gain an edge in crypto-based event contracts.
FBI filing details insider trading allegations
Federal investigators described Google’s Year in Search rankings as highly confidential commercial data that could influence advertising demand, media attention, and marketing value once released publicly. Court filings said access to the information was tightly restricted and displayed a visible “Google Confidential” warning inside the company’s internal systems.
Prosecutors alleged that Michele Spagnuolo repeatedly accessed the rankings during late 2025 before quickly placing large bets on Polymarket tied to search-related outcomes. Authorities said several of the wagers targeted events the broader market considered highly unlikely.
One trade highlighted in the complaint involved music artist d4vd. According to prosecutors, Polymarket traders assigned almost no chance that d4vd would become Google’s most searched person of the year. Investigators alleged that internal Google rankings already showed the artist at the top before the data became public, allowing Spagnuolo to place profitable bets ahead of the announcement.
The complaint also traced a series of blockchain transactions tied to wallets allegedly controlled by Spagnuolo. Investigators said funds moved through Polymarket accounts, crypto swapping services, and payment processors linked to his identity in what prosecutors described as an effort to obscure the origin of the proceeds.
Federal prosecutors charged Spagnuolo with commodities fraud, wire fraud, and money laundering, adding another high-profile case to the growing scrutiny surrounding prediction markets and crypto-based event trading.
Polymarket and regulators increase pressure
CFTC Chairman Mike Selig responded shortly after the charges became public, warning that regulators would continue cracking down on misconduct in prediction markets and crypto trading.
“If you commit fraud, insider trade, or manipulate markets, you will face the full force of the law,” Selig wrote on X.
Polymarket also pointed to its cooperation with investigators, saying the case reflected the platform’s efforts to identify suspicious trading activity. “With 2 out of 2 arrests in this industry resulting from our criminal referrals, Polymarket has emerged as the enforcement leader,” the company said in a statement.
The prosecution comes as regulators increase scrutiny of prediction markets and crypto-based event contracts. Officials in Washington are already debating how platforms offering bets on politics, sports, and financial events should be regulated.
The case could become an important test for how US authorities police insider trading and market manipulation in blockchain-based prediction markets, an industry that has grown rapidly over the past year.
Also Read: White House Reviews CFTC Rules for US Prediction Markets
