Highlights

  • Michele Spagnuolo, a staff information security engineer at Google, was charged on May 27, 2026, with Insider Trading on Polymarket for using confidential Year in Search data to generate $1.2 million in profits under the account "AlphaRaccoon."
  • The CFTC and U.S. Attorney for the Southern District of New York filed charges covering commodities Fraud, wire fraud, and Money Laundering, with Spagnuolo risking over $2.7 million in wagers on at least 23 Year in Search contracts.
  • Polymarket, valued at approximately $9 billion after Intercontinental Exchange invested up to $2 billion in October 2025, officially relaunched in the United States this week with CFTC approval, directly coinciding with the case's public disclosure.

The Charges

On May 27, 2026, the CFTC filed a complaint in the U.S. District Court for the Southern District of New York against Michele Spagnuolo, a resident of Switzerland. The complaint alleges that Spagnuolo, a Google employee, engaged in insider trading on Polymarket.com using sensitive nonpublic information regarding Google's official Year in Search list for 2025.

Spagnuolo, who used the Polymarket handle "AlphaRaccoon," generated approximately $1.2 million in profits through his trading. From at least October 2025 through at least December 2025, Spagnuolo purchased "Yes" or "No" shares on at least twenty-three of the 2025 Year in Search List contracts on Polymarket.com, including "#1 Searched Person on Google this year" and "Top 5 Most Searched People on Google 2025," with near-perfect accuracy.

Spagnuolo, a staff information security engineer at Google, allegedly used confidential information to place trades correctly betting that singer d4vd would be Google's most-searched person in 2025. According to prosecutors, "Spagnuolo had access to Google's internal data systems, including a particular Google internal software tool that provided him access to confidential, nonpublic Year in Search data."

The Mechanism of the Scheme

Between October and December 2025, an FBI Special Agent alleged that 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 October 15, 2025, Spagnuolo allegedly accessed the internal tool. The following day, the AlphaRaccoon account wagered approximately $403 on Kendrick Lamar being the number one searched person of 2025.

The specificity of the timing—access followed by near-identical trades within hours or days—creates a clear evidentiary trail. According to the US Attorney for the Southern District of New York, Spagnuolo allegedly used his employer's most confidential annual trend data compilation to pocket more than $1.2 million on Polymarket.

Google's Response and Internal Breach

Google said in a statement: "The employee accessed our Marketing material using a tool available to all employees, but using such confidential information to place bets is a serious breach of our policies. We've placed the employee on leave and will take the appropriate action."

The fact that the tool was accessible to all employees raises questions about Google's information controls. A staff information security engineer had particular access and responsibility, making the breach especially damaging to claims of Fiduciary care.

Precedent and Broader Implications

This is not the first Polymarket-related prosecution. This is the second case involving Polymarket that the U.S. attorney's office for the Southern District of New York has brought this year. A U.S. special forces soldier, Gannon Van Dyke, pleaded not guilty last month to making fraudulent bets on Polymarket about the raid that ousted Nicholas Maduro from Venezuela.

A Polymarket spokesperson told TechCrunch: "Polymarket worked closely with the U.S. Attorney's Office for the Southern District of New York and the CFTC, and is the only prediction platform to date whose cooperation has led to insider trading charges in the United States. Blockchain trading is transparent, traceable, and bad actors leave footprints."

That transparency cut both ways: it enabled the enforcement action, but it also revealed the vulnerability of prediction markets to precisely the kind of asymmetric information that insider trading rules exist to prevent.

Timing and Market Context

The timing of the public disclosure is significant. Polymarket officially relaunched in the United States this week after receiving CFTC approval. The platform announced Wednesday that its iOS app is now rolling out to waitlisted users, starting with sports markets.

Polymarket processed over $3.7 billion in trading Volume in November 2025. The platform received a massive boost when Intercontinental Exchange (ICE), Parent Company of the NYSE, invested up to $2 billion in October, valuing Polymarket at approximately $9 billion.

The contrast is stark. Polymarket achieved regulatory legitimacy and institutional backing even as its platform was being tested in real-time as a vehicle for insider trading. The case illustrates that regulatory approval of a platform does not eliminate the need for policing of conduct on that platform.

Regulatory Signals

CFTC Chairman said: "As I have said repeatedly, the Commission will not tolerate fraud, manipulation, or insider trading, regardless of the technology or platform that is used."

The message is unambiguous. Prediction markets will be treated like any other trading venue for purposes of insider trading enforcement. The fact that bets are denominated in stablecoins on a blockchain does not create a regulatory exception to decades of securities and commodities law.