Google engineer makes $1.2 million in prediction markets using internal search data, faces dual lawsuits

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Google engineer Michele Spagnuolo used the company's non-public 2025 search trend data to place 25 bets totaling $2.7 million on the Polymarket prediction market, netting a profit of $1.2 million. The DOJ and CFTC have filed simultaneous charges. (Previous coverage: U.S. House of Representatives investigates Polymarket insider trading to prevent officials from profiting from state secrets) (Background: Polymarket launches identity verification, prediction markets enter the KYC era) The U.S. Department of Justice (DOJ) and the Commodity Futures Trading Commission (CFTC) took simultaneous action on Wednesday, charging Google software engineer Michele Spagnuolo with using non-public internal company data to place bets on the Polymarket prediction market, resulting in profits of up to $1.2 million (approximately NT$39 million). According to a DOJ announcement, while working at Google, Spagnuolo obtained the company's yet-to-be-released "2025 Most Searched People" ranking data. He subsequently placed 25 bets on related markets on Polymarket, with a total wager amount of $2.7 million. Prosecutors pointed out that the Polymarket account operated by Spagnuolo, named "AlphaRaccoon," bet on options that the "market considered extremely low probability" before Google released the search results in December, ultimately yielding a profit of $1.2 million. In addition to the DOJ indictment, the CFTC also filed a parallel complaint on Wednesday, seeking the disgorgement of profits, civil monetary penalties, and a permanent ban on future prediction market trading and registration for Spagnuolo. Manhattan U.S. Attorney Jay Clayton stated that this indictment "reaffirms a rule that has existed for decades: corporate insiders cannot profit from confidential business information." Spagnuolo is charged with three counts: commodities fraud, wire fraud, and money laundering. If convicted on all counts, he faces a maximum sentence of 50 years in prison. According to court filings, communities on Discord and X began speculating in December that AlphaRaccoon might be a Google insider. Shortly thereafter, the account name was changed to a wallet address, and funds were moved through decentralized cryptocurrency exchange services and anonymous transfer services in an attempt to cover the transaction trail. This is not the first time for a Google engineer. In April of this year, the U.S. House of Representatives launched an investigation into insider trading on prediction markets like Polymarket and Kalshi, concerned that officials and corporate insiders are using non-public information to place bets for profit. CFTC Director of Enforcement David Miller stated: "We are the first line of defense in prediction markets, and we will continue to crack down on insider trading and other fraudulent activities in the future." This case highlights a common strategy in prediction markets: using information obtained earlier than the general public to place bets. In the context of Taiwan, similar situations include learning about policies through connections before the government announces them, or obtaining data through internal channels before a listed company releases its financial reports. Although these may seem like "common knowledge," competition in prediction markets is actually accelerating. With the proliferation of platforms like Polymarket, those with first-hand information are becoming the earliest beneficiaries.

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