Google engineer insider-traded search results on Polymarket, Feds allege
The charges mark the second major arrest over insider trading on a prediction market.
Spagnuolo allegedly used an internal Google tool to track who the most-searched-for individuals were and transferred some $3.8 million in USDC to a Polymarket address, said the complaint, which was signed by FBI Special Agent Brandon Racz.
The account, which used the username “AlphaRaccoon,” bet that D4vd (a rapper recently charged with murdering a 14-year-old girl) would be one of the most-searched for individuals in late November. Spagnuolo allegedly accessed Google’s internal tool, which showed D4vd trending, a few hours before the AlphaRaccoon account placed the be.
The user AlphaRaccoon moved 5 million USDC.e from their Polymarket account to a wallet, before moving the funds through a swapping service and a privacy tool, the complaint said. Some of the funds were ultimately moved to an account at a payment processor in Italy, which had been opened by someone using Michele Spagnuolo’s government identification card.
“Unlike the counterparties to his trades, Spagnuolo knew the outcome of these wagers before the trading public did because he had accessed Google’s confidential, commercially valuable internal data,” the complaint said. “Spagnuolo personally profited more than approximately $1,200,000 from his trades based on nonpublic information. Once he won, Spagnuolo then took deliberate steps to conceal his unlawful use of nonpublic information by attempting to obscure the source and ownership of his unlawful proceeds.”
Spagnuolo is being charged with commodities fraud, wire fraud and money laundering, according to the complaint.
Wednesday’s charges mark the second major arrest of someone who allegedly traded on Polymarket using insider information, following an earlier arrest of a U.S. Army soldier who allegedly bet on the Nicolas Maduro raid he was part of.
