New York: A software engineer employed by Google has been charged in the United States for allegedly using confidential company information to earn more than $1.2 million (approximately ₹11.4 crore) through bets placed on the prediction market platform Polymarket.
The accused, Michele Spagnuolo, a 36-year-old Italian citizen residing in Switzerland, faces charges of wire fraud and money laundering. According to the US Department of Justice, the alleged crimes could carry a combined maximum prison sentence of up to 50 years if convicted.
How the alleged scheme unfolded
Prosecutors allege that Spagnuolo operated under the alias “AlphaRaccoon” on Polymarket, a platform where users place bets on real-world outcomes such as company valuations, technology launches, and trending search topics.
The investigation revealed that the accused created his account in May 2024 and subsequently placed bets worth nearly $2.75 million (around ₹22.8 crore) between October 15, 2025, and December 4, 2025. These bets were reportedly linked to non-public internal information from Google.
Authorities claim that Spagnuolo had access to confidential company systems, including internal tools displaying proprietary data clearly marked as “Google Confidential”. Despite having acknowledged the company’s ethics and confidentiality policies, he allegedly used this information to predict outcomes that were not yet publicly available.
Profits tied to ‘Year in Search’ predictions
One of the key elements of the case involves Google’s annual “Year in Search” results, which highlight the most searched topics, personalities, and entertainment trends.
According to the complaint, Spagnuolo placed highly accurate bets predicting that singer D4vd would become the most searched person of 2025. He also correctly forecast outcomes related to other trending topics, including whether Zohran Mamdani would rank among the top five most searched individuals and whether the television show “Squid Game” would emerge as the most searched show.
Once Google officially released its Year in Search data on December 4, 2025, the bets were settled, resulting in profits of approximately $1.2 million. Observers on Polymarket had reportedly flagged the AlphaRaccoon account earlier due to suspiciously accurate predictions.
Legal charges and ongoing proceedings
Spagnuolo has been charged under the Commodity Exchange Act, along with counts of wire fraud and money laundering. Additionally, the Commodity Futures Trading Commission has filed a civil case alleging insider trading violations.
He was arrested in New York and presented before a federal magistrate judge, where he did not enter a plea. The court granted his release on a bond of $2.25 million (approximately ₹18.7 crore).
US Attorney Jay Clayton emphasised the seriousness of the case, stating that corporate insiders cannot exploit confidential information for personal financial gain, reinforcing long-standing legal principles governing market fairness.
Google’s response and internal implications
In response to the allegations, Google stated that while the employee accessed marketing-related materials through tools available to staff, using such information for betting purposes represents a serious breach of company policy. The firm has placed Spagnuolo on leave and indicated that further disciplinary action will follow.
According to his professional background, Spagnuolo was part of a team working on an internal inventory of artificial intelligence agents across Google and its parent entity, Alphabet. This role may have provided him with insights into internal data trends that could influence prediction markets.
Growing scrutiny on prediction markets
The case has reignited concerns about insider trading risks within emerging prediction markets. Earlier warnings from the White House had cautioned officials against using privileged information to place bets on such platforms.
Prediction markets, while innovative, operate in a regulatory grey area where access to non-public data can significantly skew outcomes. This has led to increasing calls for stricter oversight and transparency measures.
Polymarket, in its statement, reiterated its commitment to maintaining fair and transparent markets while cooperating with regulators and law enforcement agencies.
Conclusion
The charges against the Google engineer mark a significant moment in the evolving intersection of technology, finance, and ethics. As prediction markets gain popularity, this case highlights the urgent need for robust safeguards against misuse of insider information.
If proven, the allegations could set a precedent for stricter enforcement and regulation in digital betting ecosystems, reinforcing accountability for corporate insiders in an increasingly data-driven world.