A Google security engineer has been arrested in New York, facing serious charges after allegedly engaging in trading on Polymarket based on confidential internal information from the tech giant. Michele Spagnuolo, 36, an Italian citizen who has been with Google since 2014, is facing charges that include commodities fraud, wire fraud, and money laundering.
The allegations state that Spagnuolo executed trades on Polymarket between October 2025 and December 2025, leveraging sensitive information that only someone with insider access could obtain. Notably, he reportedly earned $1.2 million by predicting that a relatively unknown singer named D4vd would be Google’s most-searched person of 2025, a prediction that became a topic of widespread public interest after D4vd was implicated in a murder case and subsequently charged in April. FBI agent Brandon Racz emphasized in the complaint that Spagnuolo had prior knowledge of the outcomes of his trades, differentiating him from other traders who lacked that insider insight.
This incident is particularly significant as it marks only the second known arrest in the United States for illegal activities associated with prediction markets. In April, a US Army special forces officer faced similar charges for betting on markets concerning the capture of former Venezuelan leader Nicolás Maduro. Both cases are part of a broader examination by the Southern District of New York into wrongful conduct within these trading avenues.
In a related context, OpenAI previously terminated an employee for similar offenses involving insider trading on a prediction platform. However, Spagnuolo’s arrest stands out as the first time a tech worker has legally faced consequences for such actions.
Polymarket has recently attracted scrutiny from lawmakers for being perceived as a venue for illicit activity. Last week, James Comer, chairman of the House Committee on Oversight and Government Reform, initiated an investigation into insider trading practices specifically on prediction market platforms, seeking details from Polymarket on its customer vetting processes. The platform operates two variants: a smaller, legal version in the United States and a larger offshore version that utilizes cryptocurrency for trades and is technically prohibited in the US.
A Google spokesperson confirmed that the company is cooperating with law enforcement and emphasized that Spagnuolo’s actions constituted a serious breach of company policy. The spokesperson noted that while the employee accessed marketing material through a tool available to all employees, using such confidential data for personal gains is unacceptable.
Polymarket has taken proactive measures, collaborating closely with the US Attorney’s Office for the Southern District of New York and the Commodity Futures Trading Commission (CFTC). A spokesman for Polymarket highlighted the platform’s commitment to fair and transparent markets, asserting that its cooperation has been instrumental in progressing insider trading charges in the United States. Furthermore, the spokesperson noted the transparent nature of blockchain trading, asserting that all wallet transactions are publicly traceable, which aids in efforts to maintain market integrity.
Speculation around Spagnuolo’s trades intensified as he used an account named AlphaRaccoon, which had long been believed by observers to belong to a Google insider due to the improbability of his successful predictions. Recently, Michael Selig, the CFTC chairman, discussed the agency’s ongoing efforts to utilize artificial intelligence tools to detect market manipulation and insider trading within the industry.
