Google engineer makes $1.2 million by predicting the market using internal search data, faces double lawsuit

Google engineer Michele Spagnuolo used the company’s unpublished 2025 search-heat data to place 25 bets on Polymarket’s prediction market, totaling $2.7 million, and earned $1.2 million in profit. The Department of Justice and the CFTC jointly filed charges.
(Background: The U.S. House launches an investigation into Polymarket insider trading, preventing officials from profiting through state secrets)
(Additional context: Polymarket rolls out real-name verification, ushering in the KYC era)

Table of Contents

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• Betting on search popularity using Google’s internal data
• Two agencies move in simultaneously
• Concealing the trail: renamed accounts and crypto exchange/settlement
• The “insider trading” trend in prediction markets
• A Taiwan perspective: where is the boundary of “insider” information advantage?

On Wednesday, the U.S. Department of Justice and the Commodity Futures Trading Commission (CFTC) took coordinated action, bringing charges against Google software engineer Michele Spagnuolo, alleging that he used the company’s internal, unpublished information to place bets on Polymarket’s prediction market, earning as much as $1.2 million (about NT$39 million).

Betting on search popularity using Google’s internal data

According to the DOJ announcement, while working at Google, Spagnuolo obtained the company’s “Most Searched People in 2025” ranking data that had not yet been released to the public. He then placed a total of 25 bets on related markets on Polymarket, with total bet amounts reaching $2.7 million.

Prosecutors said the Polymarket account operated by Spagnuolo was named “AlphaRaccoon.” Before Google released its search-results in December, the account bet on options that the market considered “extremely unlikely,” ultimately earning $1.2 million in profits.

Two agencies move in simultaneously

In addition to the DOJ indictment, the CFTC also filed a parallel civil complaint on Wednesday, requiring Spagnuolo to return the profits, pay civil penalties, and be barred from future prediction-market trading and registration.

Manhattan U.S. Attorney Jay Clayton said the charges “reaffirmed a rule that has stood for decades: corporate insiders cannot profit from confidential business information.”

Spagnuolo was charged with three counts: commodities fraud, wire fraud, and money laundering. If he is convicted on all counts, he faces up to 50 years in prison.

Concealing the trail: renamed accounts and crypto exchange/settlement

According to court records, communities on Discord and X began speculating as early as December that AlphaRaccoon might be a Google insider. Soon after, the account name was changed to a wallet address, and the funds were transferred through decentralized crypto exchange services and anonymous transfer services, in an attempt to obscure the transaction trail.

The “insider trading” trend in prediction markets

This is not the first time a Google engineer has been involved. In April of this year, the U.S. House already launched an investigation into insider trading in Polymarket and Kalshi prediction markets, worried that officials and corporate insiders might use unpublished information to place bets and profit.

David Miller, Director of the CFTC’s Enforcement Division, said: “We are the frontline watchdogs for prediction markets, and we will continue to crack down on insider trading and other fraudulent conduct.”

A Taiwan perspective: where is the boundary of “insider” information advantage?

This case highlights a common playbook in prediction markets: using information obtained earlier than the general public to place bets. In Taiwan’s context, similar situations include: learning about policy details through connections before the government releases them, or obtaining information through internal channels before a listed company publishes its financial reports. While these may look like “common sense,” competition in prediction markets is actually accelerating. As platforms like Polymarket expand, people with first-hand information are becoming the earliest winners.