A Google engineer utilized internal search data to place a $2.7 million bet on Polymarket. He has been charged by the DOJ.

      Michele Spagnuolo is accused of trading under the username ‘AlphaRaccoon’, making $1.2 million on Google’s Year-in-Search results. This marks the second federal criminal case associated with Polymarket.

      Federal prosecutors in the Southern District of New York have charged Spagnuolo, a 36-year-old information-security engineer for Google in Switzerland, for leveraging internal Google search-trend data to place $2.7 million in bets on Polymarket, ultimately earning $1.2 million from the platform's contracts related to Google's 2025 Year-in-Search.

      This case, revealed on Tuesday, represents the second federal criminal prosecution linked to trading on Polymarket, and it is the first instance where the misappropriated data originates from a major Silicon Valley company.

      The details are notably precise. In late 2025, Polymarket hosted a market predicting who would rank at the top of Google’s Year-in-Search—a yearly summary of the most-searched terms and individuals.

      Prosecutors claim that Spagnuolo utilized an internal Google tool to access confidential search-trend data and made 25 different bets on the market through an account named “AlphaRaccoon.” He wagered nearly $1 million that Bianca Censori, Kanye West’s wife, would not come in first, over $600,000 that Pope Leo XIV would not take the top spot, and placed a significant bet on the artist D4vd to finish at the top, a scenario that Polymarket had assessed at near-zero probability.

      D4vd emerged victorious when Google announced the results on December 4, 2025, leading to Spagnuolo’s AlphaRaccoon account gaining $1.2 million in profit. He later removed the AlphaRaccoon label from his Polymarket account and transferred his winnings from the linked cryptocurrency wallet.

      The charges include commodities fraud, wire fraud, and money laundering, with a related civil case initiated by the Commodity Futures Trading Commission (CFTC). The SDNY filing, supported by the FBI investigation, marks a significant application of US insider-trading laws related to prediction-market trades.

      This legal approach is novel as Polymarket’s event contracts are regulated by the CFTC as derivatives, rather than being classified as securities by the SEC; traditionally, insider-trading laws have been more readily applied in the securities framework. Prosecutors have navigated this by invoking the commodities-fraud statute, applicable to manipulation within any CFTC-regulated market.

      The Spagnuolo case emerges amid increasing regulatory scrutiny of Polymarket, which has intensified over recent weeks. The US House Oversight Committee, led by James Comer, launched an investigation last Friday into the potential use of non-public information by Polymarket and Kalshi customers for trading.

      On Tuesday, Spain completely banned both platforms citing gambling license issues, and India formally blocked Polymarket on May 21. Earlier this year, a US soldier was charged for using insider knowledge to bet on Venezuelan political developments, garnering around $400,000, which until Tuesday was the only known public criminal case involving Polymarket.

      With the Spagnuolo charges, there are now two cases, and the prosecution has escalated significantly, involving a senior Silicon Valley engineer instead of a lone soldier.

      Regarding Polymarket's stance, founder Shayne Coplan publicly countered the broader insider-trading framing of the Comer investigation on Tuesday, asserting that the pricing dynamics of the platform are resilient against the impact of a few informed traders.

      Whether this defense will hold up during the Spagnuolo prosecution remains to be seen. The Year-in-Search market was reportedly small enough that a $2.7 million position was visible within the order book, and Polymarket’s surveillance team has not clarified why this position was not flagged prior to the December 2025 results.

      Spagnuolo has been arrested in Switzerland and is said to be cooperating with the extradition process. Google has not yet announced if it plans to pursue civil action against the former employee.