Key Moments:
- A Google software engineer has been charged with commodities fraud, wire fraud, and money laundering tied to Polymarket activity
- Authorities allege the engineer leveraged restricted Google “Year in Search” data for bets totaling about $2.75mn in wagers and $1.2mn profit
- The case marks the second major insider trading prosecution involving prediction markets in little over a month
Allegations of Insider Trading Fueled by Proprietary Data
Polymarket participants typically take positions on whether a real-world event will occur, with correct wagers earning $1 per share while unsuccessful bets yield nothing. However, prosecutors have alleged that a Google employee bypassed this element of chance by trading on confidential corporate information.
According to the US Attorney for the Southern District of New York, Michele Spagnuolo, a staff software engineer at Google, accessed annual trend data before its public release and utilized this knowledge to earn over $1.2 million (€1.1mn) on the Polymarket platform under the pseudonym “AlphaRaccoon.”
Spagnuolo has been indicted for commodities fraud, wire fraud, and money laundering in New York. This prosecution is notable as one of only a few high-profile insider trading cases involving prediction markets, which operate differently than traditional securities exchanges.
Restricted Access Data Used for Betting
Every December, Google unveils its “Year in Search” list, highlighting the year’s most popular user queries. The underlying data is tightly controlled, and very few employees have early access. Prosecutors allege that Spagnuolo, employed by Google since about 2014, used an internal tool marked “Google Confidential” to see these search trends prior to their publication.
On Polymarket, where users place cryptocurrency bets on events ranging from elections to entertainment, new markets opened in October 2025, allowing bets on Google’s most-searched person of the year. Around that time, the AlphaRaccoon account began betting large sums on specific outcomes, allegedly informed by Spagnuolo’s advance access to Google’s data.
Bets Placed with Foreknowledge of Search Trends
Between October and December 2025, the FBI asserts that Spagnuolo accessed the confidential data and placed wagers soon after. On or about October 15, 2025, Spagnuolo purportedly accessed the internal database. The following day, AlphaRaccoon placed about $403 (€373) on Kendrick Lamar as the top search and roughly $10,807 (€10,022) against Pope Leo XIV.
Prosecutors claim that Spagnuolo’s position was grounded in prior knowledge that these would be the actual results.
Strategic Wagers Against Market Consensus
The alleged scheme stood out for leveraging insider information to bet against the crowd. AlphaRaccoon took approximately $937,688 (€869,083) in positions opposing Bianca Censori as the top search when her market odds hovered around 85%. Additional bets included about $613,587 (€568,628) against Pope Leo XIV at a 56% probability and approximately $509,149 (€471,741) against Donald Trump at around 90%.
Cumulatively, AlphaRaccoon reportedly wagered a total of $2.75mn (€2.55mn) across about 25 separate bets linked to Year in Search outcomes.
Profits Realized and Cryptocurrency Transfers
Upon Google’s public release of the global top five most trending people on December 4, 2025, which included d4vd, Kendrick Lamar, Jimmy Kimmel, Tyler Robinson, and Pope Leo XIV, AlphaRaccoon’s betting activities culminated in a $1.2mn (€1.11m) profit.
The Polymarket platform distributed approximately $3.9mn (€3.6mn) in USDC.e cryptocurrency to AlphaRaccoon, and on December 10, the account transferred about $5mn (€4.6mn) to another wallet. These transactions, prosecutors allege, involved steps designed to obfuscate traceability, including multiple cryptocurrency swaps and the use of privacy services.
| Bet Target | Wager Amount (USD) | Implied Market Odds |
|---|---|---|
| Bianca Censori – “No” | $937,688 | 85% |
| Pope Leo XIV – “No” | $613,587 | 56% |
| Donald Trump – “No” | $509,149 | 90% |
| Kendrick Lamar – “Yes” | $403 | 3% |
| Pope Leo XIV – “No” | $10,807 | Not Specified |
Online Suspicion and Law Enforcement Tracing
As Discord and X communities began discussing the possibility of a Google insider behind AlphaRaccoon, the account’s username was replaced with an anonymous identifier. Notwithstanding these efforts, law enforcement traced the flow of funds. Cryptocurrency records allegedly tied AlphaRaccoon’s holdings to a wallet that had transferred roughly $149,980 (€138,916) to a payment processor account registered to Michele Spagnuolo using Italian identification.
Legal Proceedings and Broader Context
Spagnuolo now faces charges for allegedly using information not available to the public when making Polymarket trades, misusing confidential information for personal benefit, and concealing transactional origins after December 2025. The criminal complaint was executed before US Magistrate Judge Sarah Netburn.
This case follows the earlier prosecution of a U.S. Army Special Forces member in April, who is alleged to have used sensitive military information to profit from Polymarket bets. Prosecutors claim that incident turned about $33,000 in wagers into over $400,000, with the accused entering a not guilty plea.
- Author
Daniel Williams
