The US Department of Justice and the Commodity Futures Trading Commission (CFTC) have filed charges against Google software engineer Michele Spagnuolo for alleged insider trading on the prediction market platform Polymarket. According to the Justice Department, Spagnuolo accessed unreleased internal information at Google and placed 25 bets worth $2.7 million on markets related to the most searched individuals on Google in 2025.
Prosecutors allege that Spagnuolo operated the Polymarket account AlphaRaccoon, which profited $1.2 million on outcomes that the market initially treated as unlikely. The charges were unsealed on Wednesday, with the DOJ accusing him of commodities fraud, wire fraud, and money laundering. If convicted, he could face a maximum sentence of 50 years in prison.
The CFTC filed a separate complaint with similar allegations, seeking restitution, disgorgement, civil monetary penalties, and trading and registration bans. CFTC director of enforcement David Miller stated that the division is actively policing illegal use of inside information in prediction markets.
According to court documents, the AlphaRaccoon account changed its username to a wallet address after community members on Discord and X speculated that the account belonged to a Google insider. Funds were allegedly sent to a decentralized crypto swapping service and a privacy-focused transfer service.
Manhattan US District Attorney Jay Clayton said the charges reinforce that corporate insiders cannot use confidential business information for profit. The case adds to growing scrutiny of prediction markets, with Congress recently launching a probe into Polymarket and Kalshi over insider trading incidents.
This case follows a separate incident in April where a US soldier was charged with using classified information to place bets on Polymarket regarding the capture of former Venezuelan president Nicol?s Maduro. The DOJ and CFTC continue to target insider trading in emerging markets.