The feds say a Google engineer made $1.2 million on Polymarket. He could face decades in prison.

Source: Mashable Tech

Insider Trading Allegations in Prediction Markets

Prediction markets such as Kalshi and Polymarket have faced insider‑trading concerns, and the U.S. Department of Justice (DOJ) is now pursuing legal action against individuals involved.

Last month, the DOJ charged a U.S. Army soldier with profiting from Polymarket trades using classified information about the capture of Nicolás Maduro in Venezuela.

The DOJ has now filed another insider‑trading charge, this time against a Google engineer.

DOJ Complaint Against Google Engineer

According to the DOJ complaint, Google engineer Michele Spagnuolo allegedly earned more than $1.2 million from Polymarket trades that relied on confidential Google business information.

“Today’s charges reinforce a decades‑old message: corporate insiders cannot use confidential business information to turn a profit in our markets,” U.S. Attorney Jay Clayton said. “As alleged, Spagnuolo violated the duties he owed to his employer and used Google’s confidential business information to make more than $1.2 million in trading profits on Polymarket.”

Spagnuolo, a software engineer at Google for over a decade, is said to have placed trades under the alias “AlphaRaccoon.”

The “Year in Search” Data

Each year, Google compiles its top trending searches across various categories in a feature called “Year in Search.” Before public release, this data is marked “Google Confidential.” The DOJ alleges that Spagnuolo used this unreleased information to trade on Polymarket ahead of Google’s 2025 Year in Search release.

• Timeframe: October – December 2025
• Subject of trades: Predictions about the “Top 5 Most Searched People on Google” for 2025
• Public release date: December 4, 2025

(For reference, the top five most‑searched people on Google in 2025 were d4vd, Kendrick Lamar, Jimmy Kimmel, Tyler Robinson, and Pope Leo XIV.)

Spagnuolo, an Italian citizen residing in Switzerland, is alleged to have profited over $1.2 million from these trades.

Charges and Potential Penalties

Spagnuolo faces charges of:

• Violating the Commodity Exchange Act
• Wire fraud
• Money laundering

Each count carries a maximum penalty of 10 to 20 years in prison.

References

• DOJ complaint: https://www.justice.gov/usao-sdny/pr/google-employee-charged-insider-trading
• Soldier charge: https://www.justice.gov/opa/pr/us-soldier-charged-using-classified-information-profit-prediction-market-bets
• 2025 Year in Search video: https://www.youtube.com/watch?v=Vv_sjpclsZ8