Google engineer Spagnuolo charged with $1.2M Polymarket insider trading using search data
Federal prosecutors charged Google engineer Michele Spagnuolo on May 27 with commodities fraud, wire fraud, and money laundering for allegedly using nonpublic Google search data to trade on Polymarket. The engineer allegedly traded under the handle AlphaRaccoon, risked $2.7 million, and earned $1.2 million in profits on event contracts tied to search result-related outcomes. Online sleuths including blockchain engineer Jeong first identified suspicious trading patterns on social media. The case, unsealed Wednesday and first reported by the Wall Street Journal, involves insider-trading charges tied to a crypto-native prediction market platform. Enforcement officials in Washington brought the charges as Polymarket faces heightened regulatory scrutiny over its surveillance capabilities.
Polymarket must now demonstrate its surveillance systems can flag search-data-driven positions by corporate insiders. Any surveillance gap gives DOJ and CFTC precedent to treat the platform as a co-defendant in future parallel actions.