Google Security Engineer Arrested in Million-Dollar Polymarket Trading Scheme

At a glance:

• Google security engineer Michele Spagnuolo was arrested for allegedly using confidential internal data to make $1.2 million in trades on Polymarket prediction markets
• He is charged with commodities fraud, wire fraud, and money laundering related to trades placed between October and December 2025
• This marks only the second arrest in the US for illicit prediction market activity, highlighting growing regulatory scrutiny of the platform

Spagnuolo, a 36-year-old Italian citizen who had worked at Google since 2014, was arrested this morning in New York. According to federal charges, he placed trades on Polymarket from around October 2025 to December 2025 using internal Google data. The complaint specifically alleges that he netted $1.2 million trading on who Google's most-searched person of the year would be in 2025, correctly predicting that the winner would be D4vd, a once obscure singer who became the subject of intense public scrutiny after being suspected of murder.

Unlike the counterparties to his trades, Spagnuolo allegedly knew the outcome of these wagers before the trading public did because he had accessed Google's confidential, commercially valuable internal data, according to FBI agent Brandon Racz in the complaint. D4vd was ultimately charged in the murder case in April 2025, which likely informed the search volume data that Spagnuolo accessed internally at Google.

This case represents only the second known arrest in the United States for illicit activity on prediction markets. In April 2025, a US Army special forces officer was arrested for allegedly placing bets on markets related to the capture of former Venezuelan leader Nicolás Maduro. Both cases have been brought by the Southern District of New York, which has shown particular interest in prosecuting prediction market-related crimes.

OpenAI fired an employee earlier this year for using insider information to make trades on a prediction platform, but this is the first time that a tech worker has been arrested for their alleged activity. The distinction matters because it moves the issue from internal HR violations to criminal prosecution, potentially setting precedent for how companies handle employee trading of confidential information.

Polymarket has come under fire from lawmakers for its reputation as a hub of illegal activity. Last week, House Committee on Oversight and Government Reform chairman James Comer launched an investigation into insider trading on prediction markets platforms and requested information from Polymarket about how the company vets its customers. There are two versions of Polymarket: a smaller platform that is legal in the United States and a much larger offshore version that is technically blocked in the US and where traders use cryptocurrency to place their wagers.

We're working with law enforcement on their investigation," Google spokesperson Jaclyn Vazquez said in a statement to WIRED. "The employee accessed our marketing material using a tool available to all employees, but using such confidential information to place bets is a serious breach of our policies. We've placed the employee on leave and will take the appropriate action."

Polymarket worked closely with the US Attorney's Office for the Southern District of New York and the Commodity Futures Trading Commission, and is the only prediction platform to date whose cooperation has led to insider trading charges in the United States," Polymarket spokesperson Connor Brandi told WIRED. "Blockchain trading is transparent, traceable, and bad actors leave footprints. We are committed to maintaining accurate, fair, and transparent markets as well as enforcing our rules and working with our regulators and law enforcement."

In a social media post, Polymarket said the arrest was the result of a referral it made to authorities. Anyone can trace activity on Polymarket's crypto-based platform, since all of the wallet transactions are public. Spagnuolo allegedly made his trades using an account with the user name AlphaRaccoon, which Polymarket watchers had long speculated may have belonged to a Google insider, since the odds of correctly predicting the answers to the questions he wagered on were so improbable.

Earlier this month, Michael Selig, chairman of the CFTC, which is tasked with regulating prediction markets in the US, told WIRED that the agency is using artificial intelligence tools to hunt for market manipulation and insider trading in the industry. The CFTC's increased technological focus suggests that regulators are preparing for more cases like this one, where digital forensics and blockchain analysis play crucial roles in uncovering illegal trading patterns.