Google Security Engineer Arrested in Million-Dollar Polymarket Trading Scheme

A Google security engineer has been charged with multiple offenses for allegedly executing trades on Polymarket based on confidential internal information from the tech company. Michele Spagnuolo, a 36-year-old Italian national, was apprehended this morning in New York, as initially reported by ABC News.

Spagnuolo faces charges including one count each of commodities fraud, wire fraud, and money laundering. He has been employed at Google since 2014 and is stationed at the company's offices in Zurich, Switzerland.

According to the complaint, Spagnuolo conducted trades on Polymarket from approximately October 2025 to December 2025, utilizing proprietary Google data. Notably, he earned $1.2 million by predicting the identity of Google's most-searched person of 2025, accurately selecting D4vd, a previously little-known singer who garnered significant public attention following allegations of murder. (D4vd was subsequently charged in connection with the case in April.)

"Unlike the counterparties to his trades, Spagnuolo was aware of the outcomes of these wagers ahead of the trading public because he had accessed Google's confidential, commercially valuable internal data," stated FBI agent Brandon Racz in the complaint.

Market Oversight and Pattern Detection

This incident marks the second known arrest in the United States linked to illegal actions on prediction markets. In April, a US Army special forces officer was detained for allegedly placing bets on markets concerning the capture of former Venezuelan leader Nicolás Maduro. Both cases are being prosecuted by the Southern District of New York.

Earlier this year, OpenAI terminated an employee for exploiting insider information to make trades on a prediction platform; however, this is the first instance of a tech worker being arrested for similar alleged activities.

Transactions on Polymarket’s cryptocurrency-based platform can be publicly monitored, as all wallet transactions are transparent. Spagnuolo reportedly executed his trades through an account bearing the username AlphaRaccoon, which had been the subject of speculation among Polymarket observers, given the unlikely odds of his predictions.

Regulatory Response

Polymarket has faced criticism from legislators for its association with illegal activities. Recently, House Committee on Oversight and Government Reform chairman James Comer initiated an inquiry into insider trading on prediction markets and sought information from Polymarket regarding its customer vetting processes. Polymarket operates in two formats: a smaller, legal platform in the United States and a much larger offshore version that is technically prohibited in the US, where users trade with cryptocurrency.

Earlier this month, Michael Selig, the chairman of the Commodity Futures Trading Commission (CFTC), which oversees prediction markets in the United States, informed WIRED that the agency is employing artificial intelligence tools to detect market manipulation and insider trading within the sector.

Company Statements

"We are collaborating with law enforcement during their investigation. The employee accessed our marketing materials through a tool available to all employees; however, using such confidential information for trading purposes is a significant breach of our policies. The employee has been placed on leave, and we will take appropriate action," said Google spokesperson Jaclyn Vazquez in a statement to WIRED.

"Polymarket has 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," stated Connor Brandi, a spokesperson for Polymarket, in a statement to WIRED. "Blockchain trading is transparent and traceable, and bad actors leave traces. We are dedicated to maintaining accurate, fair, and transparent markets, as well as enforcing our regulations and collaborating with law enforcement." In a social media update, Polymarket acknowledged that the arrest resulted from a referral it made to authorities.