SouthernWorldwide.com – A Google software engineer is facing federal charges for allegedly profiting over $1.2 million through insider trading on Polymarket, a popular prediction market. This marks the second insider trading prosecution involving a Polymarket user in recent months.
Court documents released by the Justice Department reveal that Michele Spagnuolo is accused of utilizing an internal company tool late last year. He allegedly accessed data on Google’s top-trending searches for 2025. Subsequently, he is said to have placed millions of dollars in bets on Polymarket regarding whether various celebrities would be among the most searched individuals in 2025.
This occurred weeks before Google publicly released its annual Year in Search report. The most searched person of 2025 was ultimately revealed to be D4vd, a singer who gained significant attention last year. This was due to a disturbing incident involving a dismembered body found in the trunk of a car registered to him.
Using the Polymarket username “AlphaRaccoon,” Spagnuolo allegedly bet hundreds of dollars that D4vd would appear in the most widely searched individuals list. At the time of his bet, the market assessed the odds of D4vd’s appearance as quite slim.
Days after the Year in Search data became public, Spagnuolo’s Polymarket account reportedly transferred millions of dollars in cryptocurrency to a crypto wallet. The accusations against Spagnuolo include commodities fraud, wire fraud, and money laundering.
The Commodity Futures Trading Commission (CFTC) has also filed a civil lawsuit against him on similar grounds. Spagnuolo, an Italian citizen residing in Switzerland, had his charges unsealed on Wednesday. He was arrested in New York on Wednesday and appeared before a magistrate judge.
The judge released him on a $2.25 million bond, as confirmed by the U.S. Attorney’s Office for the Southern District of New York to CBS News. A Google spokesperson stated that Spagnuolo has been placed on leave and that the tech giant is cooperating with law enforcement.
“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,” the spokesperson said. Polymarket announced on X (formerly Twitter) that it had flagged the trader. A company spokesperson indicated that Polymarket worked closely with federal authorities, asserting that it is the only prediction platform to date whose cooperation has resulted in insider trading charges in the United States.
The charges against Spagnuolo come just one month after a U.S. special forces soldier was arrested. The soldier was accused of winning over $400,000 by betting on the raid to capture former Venezuelan leader Nicolás Maduro before the raid’s news was made public. The soldier has pleaded not guilty to the charges.
These cases have brought to light concerns regarding the potential for insider trading on prediction markets, which have seen a surge in popularity in recent years. Earlier this year, a data analyst shared with “60 Minutes” that he had observed other instances of Polymarket accounts accumulating millions by correctly predicting outcomes related to U.S. military operations. These predictions sometimes achieved an astonishingly high win rate.
Polymarket maintains that insider trading is prohibited on its platform. The company states that it actively monitors for misconduct and refers illegal activities to federal authorities. “Blockchain trading is transparent, traceable, and bad actors leave footprints,” a company spokesperson stated.
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“We are committed to maintaining accurate, fair, and transparent markets as well as enforcing our rules and working with our regulators and law enforcement.”
