US authorities have charged a Google software engineer with insider trading, alleging he used confidential company information to profit on the prediction market Polymarket.
The Justice Department announced charges against Michele Spagnuolo on Wednesday, accusing him of accessing unreleased internal Google data. Prosecutors say he placed 25 bets totaling $2.7 million on markets related to Google's most searched individuals in 2025.
According to the complaint, Spagnuolo operated the Polymarket account "AlphaRaccoon," which generated $1.2 million in profit on outcomes the market considered unlikely. The Commodity Futures Trading Commission filed a parallel civil action.
After online communities began speculating that AlphaRaccoon was a Google insider, the account's username was allegedly changed to a wallet address. Funds were then sent through a decentralized crypto swapping service and a privacy-focused transfer platform.
Spagnuolo faces charges of commodities fraud, wire fraud, and money laundering, carrying a maximum sentence of 50 years in prison. The CFTC is seeking restitution, penalties, and trading bans.
This case comes amid growing scrutiny of prediction markets. Congress recently launched a probe into insider trading on Polymarket and Kalshi, particularly concerned about government officials using non-public information.