We explain the latest scandal involving big earnings, insider trading, and prediction markets.
The US Department of Justice and the CFTC have filed charges against Google engineer Michele Spagnuolo for using confidential corporate information to place bets on the Polymarket platform.
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What Is the Case About?
According to prosecutors, Spagnuolo, operating under the pseudonym AlphaRaccoon, participated in 23 to 25 contracts related to “Google Year in Search 2025,” rankings of the most popular search queries. Using the company’s confidential data, he allegedly earned approximately $1.2M.
The charges include:
- Commodities fraud
- Wire fraud
- Money laundering
The maximum sentence on all counts could reach 50 years. The CFTC is seeking fines, disgorgement of profits, and a trading ban. Spagnuolo was arrested in New York and released on $2.25M bail.
Company Reactions
Google stated that the employee has been suspended and that the company is fully cooperating with the investigation.
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“Using confidential information for betting is a serious violation of our policies,” Google noted.
Polymarket reported that its monitoring system flagged the suspicious activity and provided the data to authorities.
Pressure on Prediction Markets Is Growing
This is not the first insider trading case on Polymarket. Previously:
- A US serviceman was charged with using classified data on Venezuela
- An IDF reservist was charged with using Israeli data
- The US Congress launched an official investigation into Polymarket and Kalshi
Amid these scandals, Polymarket is strengthening its KYC/AML procedures and geo-blocking. The platform is already restricted in dozens of countries, including Spain, India, Indonesia, and several European nations.
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